Burke & Herbert Financial Services' (NASDAQ:BHRB) Dividend Will Be $0.53
The board of Burke & Herbert Financial Services Corp. (NASDAQ:BHRB) has announced that it will pay a dividend of $0.53 per share on the 1st of March. Based on this payment, the dividend yield will be 3.5%, which is fairly typical for the industry.
While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Burke & Herbert Financial Services' stock price has increased by 36% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.
See our latest analysis for Burke & Herbert Financial Services
Burke & Herbert Financial Services' Earnings Will Easily Cover The Distributions
Solid dividend yields are great, but they only really help us if the payment is sustainable.
Burke & Herbert Financial Services has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Burke & Herbert Financial Services' payout ratio of 70% is a good sign as this means that earnings decently cover dividends.
Looking forward, could fall by 7.6% if the company can't turn things around from the last few years. If recent patterns in the dividend continue, we could see the future payout ratio reaching 77% in the next 12 months which is on the higher end of the range we would say is sustainable.
Burke & Herbert Financial Services Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $1.90 in 2014 to the most recent total annual payment of $2.12. This implies that the company grew its distributions at a yearly rate of about 1.1% over that duration. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
Dividend Growth Is Doubtful
Investors could be attracted to the stock based on the quality of its payment history. Unfortunately things aren't as good as they seem. Over the past five years, it looks as though Burke & Herbert Financial Services' EPS has declined at around 7.6% a year. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed.
Our Thoughts On Burke & Herbert Financial Services' Dividend
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Burke & Herbert Financial Services has been making. This company is not in the top tier of income providing stocks.
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. As an example, we've identified 1 warning sign for Burke & Herbert Financial Services that you should be aware of before investing. Is Burke & Herbert Financial Services 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.
