Byline Bancorp (NYSE:BY) Has Affirmed Its Dividend Of $0.09
The board of Byline Bancorp, Inc. (NYSE:BY) has announced that it will pay a dividend on the 20th of February, with investors receiving $0.09 per share. This payment means the dividend yield will be 1.6%, which is below the average for the industry.
Check out our latest analysis for Byline Bancorp
Byline Bancorp's Earnings Will Easily Cover The Distributions
If it is predictable over a long period, even low dividend yields can be attractive.
Byline Bancorp has a short history of paying out dividends, with its current track record at only 4 years. Despite the company's shorter dividend history however, calculating for its payout ratio of 13% shows that Byline Bancorp is able to comfortably pay dividends.
Looking forward, earnings per share is forecast to fall by 11.9% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 17% over the same time period, which is in a pretty comfortable range.
Byline Bancorp Doesn't Have A Long Payment History
The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2020, the dividend has gone from $0.12 total annually to $0.36. This implies that the company grew its distributions at a yearly rate of about 32% over that duration. Byline Bancorp has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. Byline Bancorp has impressed us by growing EPS at 15% per year over the past five years. Byline Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We should note that Byline Bancorp has issued stock equal to 17% of shares outstanding. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.
We Really Like Byline Bancorp's Dividend
Overall, we like to see the dividend staying consistent, and we think Byline Bancorp might even raise payments in the future. 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.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 2 warning signs for Byline Bancorp that investors should take into consideration. Is Byline 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.
