Burke & Herbert Financial Services (NASDAQ:BHRB) Is Paying Out A Dividend Of $0.53
Burke & Herbert Financial Services Corp. (NASDAQ:BHRB) will pay a dividend of $0.53 on the 1st of December. This means the dividend yield will be fairly typical at 4.7%.
View our latest analysis for Burke & Herbert Financial Services
Burke & Herbert Financial Services' Earnings Will Easily Cover The Distributions
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.
Burke & Herbert Financial Services has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 76%, which means that Burke & Herbert Financial Services would be able to pay its last dividend without pressure on the balance sheet.
Looking forward, earnings per share could rise by 2.8% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the future payout ratio will be 51%, which would make us comfortable with the sustainability of the dividend, despite the levels currently being quite high.
Burke & Herbert Financial Services Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $1.90 in 2013, and the most recent fiscal year payment was $2.12. This means that it has been growing its distributions at 1.1% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
The Dividend's Growth Prospects Are Limited
The company's investors will be pleased to have been receiving dividend income for some time. However, Burke & Herbert Financial Services has only grown its earnings per share at 2.8% per annum over the past five years. Slow growth and a high payout ratio could mean that Burke & Herbert Financial Services has maxed out the amount that it has been able to pay to shareholders. This isn't the end of the world, but for investors looking for strong dividend growth they may want to look elsewhere.
Our Thoughts On Burke & Herbert Financial Services' Dividend
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Burke & Herbert Financial Services' payments, as there could be some issues with sustaining them into the future. Although they have been consistent in the past, we think the payments are a little high to be sustained. This company is not in the top tier of income providing stocks.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Are management backing themselves to deliver performance? Check their shareholdings in Burke & Herbert Financial Services in our latest insider ownership analysis. 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.
