As an income-driven investor, dividend-related events are always something I tend to keep an eye on. With that said, and in the wake of its latest dividend increase, I wanted to highlight several reasons why I've chosen to stay bullish on shares of Hingham Institution for Savings (NASDAQ: HIFS).

A Brief Summary of the Company

Headquartered in Hingham, Massachusetts, Hingham Institution for Savings HIFS is a community bank, providing various financial products and services to individuals and small businesses. The company’s primary deposit products include savings, checking, term certificate, and individual retirement accounts, as well as demand accounts, negotiable order of withdrawal accounts, money market accounts, and certificates of deposit. Its loan portfolio comprises residential real estate, commercial real estate, construction, home equity, consumer, and commercial loans, as well as offers courier and overdraft protection services.

Trend Behavior Could Improve Over the Next Few Months

On Friday, shares of HIFS, which currently possess a market cap of $172 million, a P/E ratio of 8.59, and an annualized dividend yield of 1.68% ($1.37), settled at a price of $81.14/share. Based on a closing price of $81.14/share, shares of HIFS are trading 0.55% below their 20-day simple moving average, 1.39% below their 50-day simple moving average, and 4.80% above their 200-day simple moving average.

Although these numbers indicate a short-term downtrend and mid-to-long term uptrend for the stock, which generally translates into a selling mode for most near-term traders and a buying mode for many long-term investors, I strongly believe we could its trend behavior improve on the heels of its dividend hike.

Recent Dividend Behavior

On Friday, September 26, Hingham announced a monthly dividend increase of $0.01/share, which brings its upcoming dividend payout to $0.28/share. It should be noted that the increase will be paid on October 20 for shareholders of record as of October 10. This boost represents a 3.7% increase from its prior dividend of $0.27/share, which had been paid to shareholders on July 21.

Strong 5-Year Dividend Growth

Over the last five years we’ve seen Hingham increase its annualized dividend from $1.15/share in 2010 to its most recent annualized dividend of $1.37/share. This behavior not only demonstrates an overall increase of $0.22/share or $0.044/share per year but also demonstrates a 5-year dividend growth rate of 19.13%.

Conclusion

For those of you who may be considering a position in Hingham Institution for Savings, I strongly recommend keeping a close eye on the company's dividend behavior over the next 18-24 months as it should directly impact both the company’s near-term trend behavior and the long-term value of its shares.