Bankwell Financial Group (NASDAQ:BWFG) Is Paying Out A Dividend Of $0.20
The board of Bankwell Financial Group, Inc. (NASDAQ:BWFG) has announced that it will pay a dividend of $0.20 per share on the 20th of November. This payment means that the dividend yield will be 3.4%, which is around the industry average.
Check out our latest analysis for Bankwell Financial Group
Bankwell Financial Group's Dividend Forecasted To Be Well Covered By Earnings
Unless the payments are sustainable, the dividend yield doesn't mean too much.
Bankwell Financial Group has established itself as a dividend paying company, given its 8-year history of distributing earnings to shareholders. Using data from its latest earnings report, Bankwell Financial Group's payout ratio sits at 17%, an extremely comfortable number that shows that it can pay its dividend.
Looking forward, earnings per share is forecast to fall by 30.1% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 22% over the same time period, which is in a pretty comfortable range.
Bankwell Financial Group Is Still Building Its Track Record
The dividend's track record has been pretty solid, but with only 8 years of history we want to see a few more years of history before making any solid conclusions. Since 2015, the annual payment back then was $0.20, compared to the most recent full-year payment of $0.80. This implies that the company grew its distributions at a yearly rate of about 19% over that duration. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
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. Bankwell Financial Group has seen EPS rising for the last five years, at 17% per annum. Bankwell Financial Group definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Bankwell Financial Group Looks Like A Great Dividend Stock
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 2 warning signs for Bankwell Financial Group you should be aware of, and 1 of them is a bit unpleasant. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
