Amerant Bancorp (NASDAQ:AMTB) Has Affirmed Its Dividend Of $0.09
The board of Amerant Bancorp Inc. (NASDAQ:AMTB) has announced that it will pay a dividend of $0.09 per share on the 31st of August. This payment means the dividend yield will be 1.8%, which is below the average for the industry.
See our latest analysis for Amerant Bancorp
Amerant Bancorp's Payment Expected To Have Solid Earnings Coverage
If it is predictable over a long period, even low dividend yields can be attractive.
Having paid out dividends for only 2 years, Amerant Bancorp does not have much of a history being a dividend paying company. Based on its last earnings report however, the payout ratio is at a comfortable 18%, meaning that Amerant Bancorp may be able to sustain this dividend for future years if it continues on this earnings trend.
Looking forward, earnings per share is forecast to rise by 14.4% over the next year. If the dividend continues on this path, the future payout ratio could be 16% by next year, which we think can be pretty sustainable going forward.
Amerant Bancorp Doesn't Have A Long Payment History
The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 2 years, which isn't that long in the grand scheme of things. Since 2021, the annual payment back then was $0.24, compared to the most recent full-year payment of $0.36. This works out to be a compound annual growth rate (CAGR) of approximately 22% a year over that time. Amerant Bancorp has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. Amerant Bancorp has seen EPS rising for the last five years, at 13% per annum. Amerant Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like Amerant Bancorp's Dividend
Overall, we like to see the dividend staying consistent, and we think Amerant Bancorp might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 2 warning signs for Amerant Bancorp that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
