Byline Bancorp (NYSE:BY) Will Pay A Dividend Of $0.09
The board of Byline Bancorp, Inc. (NYSE:BY) has announced that it will pay a dividend of $0.09 per share on the 22nd of August. Including this payment, the dividend yield on the stock will be 1.6%, which is a modest boost for shareholders' returns.
View our latest analysis for Byline Bancorp
Byline Bancorp's Earnings Will Easily Cover The Distributions
It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.
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 14% shows that Byline Bancorp is able to comfortably pay dividends.
EPS is set to fall by 2.5% over the next 12 months. But if the dividend continues along recent trends, we estimate the future payout ratio could be 22%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business in the future.
Byline Bancorp Is Still Building Its Track Record
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 2019, the dividend has gone from $0.12 total annually to $0.36. This works out to be a compound annual growth rate (CAGR) of approximately 32% a year over that time. 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
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that Byline Bancorp has grown earnings per share at 33% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.
Byline Bancorp Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The earnings easily cover the company's distributions, and the company is generating plenty of cash. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Byline Bancorp that investors should take into consideration. 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.
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