Bank of Marin Bancorp (NASDAQ:BMRC) Has Announced A Dividend Of $0.25
The board of Bank of Marin Bancorp (NASDAQ:BMRC) has announced that it will pay a dividend on the 15th of February, with investors receiving $0.25 per share. This makes the dividend yield 5.1%, which will augment investor returns quite nicely.
Check out our latest analysis for Bank of Marin Bancorp
Bank of Marin Bancorp's Earnings Will Easily Cover The Distributions
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.
Having distributed dividends for at least 10 years, Bank of Marin Bancorp has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Bank of Marin Bancorp's payout ratio of 80% is a good sign as this means that earnings decently cover dividends.
Looking forward, EPS is forecast to rise by 49.5% over the next 3 years. Analyst estimates also show the future payout ratio being 62% in the same 3 years which brings it into quite a comfortable range.
Bank of Marin Bancorp Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $0.36 in 2014 to the most recent total annual payment of $1.00. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
The Dividend Has Limited Growth Potential
Investors could be attracted to the stock based on the quality of its payment history. Let's not jump to conclusions as things might not be as good as they appear on the surface. Bank of Marin Bancorp's EPS has fallen by approximately 12% per year during the past five years. A sharp decline in earnings per share is not great from from a dividend perspective. Even conservative payout ratios can come under pressure if earnings fall far enough. It's not all bad news though, as the earnings are predicted to rise over the next 12 months - we would just be a bit cautious until this becomes a long term trend.
Our Thoughts On Bank of Marin Bancorp's Dividend
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Bank of Marin Bancorp's payments, as there could be some issues with sustaining them into the future. In the past the payments have been stable, but we think the company is paying out too much for this to continue for the long term. We would probably look elsewhere for an income investment.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 2 warning signs for Bank of Marin Bancorp that you should be aware of before investing. Is Bank of Marin Bancorp 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.
