BancFirst (NASDAQ:BANF) Has Announced That It Will Be Increasing Its Dividend To $0.40
BancFirst Corporation (NASDAQ:BANF) will increase its dividend from last year's comparable payment on the 17th of July to $0.40. Although the dividend is now higher, the yield is only 1.9%, which is below the industry average.
See our latest analysis for BancFirst
BancFirst's Payment Expected To Have Solid Earnings Coverage
While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.
BancFirst has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past records don't necessarily translate into future results, the company's payout ratio of 24% also shows that BancFirst is able to comfortably pay dividends.
Over the next year, EPS is forecast to fall by 11.2%. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 31%, which would be comfortable for the company to continue in the future.
BancFirst Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the annual payment back then was $0.58, compared to the most recent full-year payment of $1.60. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that BancFirst has been growing its earnings per share at 17% a year over the past five years. BancFirst definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
BancFirst Looks Like A Great Dividend Stock
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for BancFirst that investors need to be conscious of moving forward. Is BancFirst not quite the opportunity you were looking for? Why not check out our selection of top 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.
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