Advertisement
U.S. markets open in 5 hours 2 minutes
  • S&P Futures

    5,303.25
    -5.00 (-0.09%)
     
  • Dow Futures

    40,102.00
    -42.00 (-0.10%)
     
  • Nasdaq Futures

    18,490.00
    -13.75 (-0.07%)
     
  • Russell 2000 Futures

    2,134.00
    -4.40 (-0.21%)
     
  • Crude Oil

    81.81
    +0.46 (+0.57%)
     
  • Gold

    2,213.00
    +0.30 (+0.01%)
     
  • Silver

    24.55
    -0.21 (-0.84%)
     
  • EUR/USD

    1.0796
    -0.0034 (-0.31%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Vix

    12.96
    +0.18 (+1.41%)
     
  • GBP/USD

    1.2608
    -0.0030 (-0.24%)
     
  • USD/JPY

    151.3630
    +0.1170 (+0.08%)
     
  • Bitcoin USD

    70,540.70
    +689.71 (+0.99%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,952.56
    +20.58 (+0.26%)
     
  • Nikkei 225

    40,168.07
    -594.66 (-1.46%)
     

Eagle Bancorp Montana's (NASDAQ:EBMT) Shareholders Will Receive A Bigger Dividend Than Last Year

Eagle Bancorp Montana, Inc.'s (NASDAQ:EBMT) dividend will be increasing from last year's payment of the same period to $0.1375 on 2nd of September. The payment will take the dividend yield to 2.9%, which is in line with the average for the industry.

View our latest analysis for Eagle Bancorp Montana

Eagle Bancorp Montana's 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.

Eagle Bancorp Montana has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Eagle Bancorp Montana's last earnings report, the payout ratio is at a decent 33%, meaning that the company is able to pay out its dividend with a bit of room to spare.

The next 3 years are set to see EPS grow by 93.4%. Analysts forecast the future payout ratio could be 18% over the same time horizon, which is a number we think the company can maintain.

historic-dividend
historic-dividend

Eagle Bancorp Montana Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The annual payment during the last 10 years was $0.285 in 2012, and the most recent fiscal year payment was $0.55. This implies that the company grew its distributions at a yearly rate of about 6.8% over that duration. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

Eagle Bancorp Montana May Find It Hard To Grow The Dividend

Investors could be attracted to the stock based on the quality of its payment history. Earnings has been rising at 4.0% per annum over the last five years, which admittedly is a bit slow. If Eagle Bancorp Montana is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

We Really Like Eagle Bancorp Montana's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for Eagle Bancorp Montana that investors need to be conscious of moving forward. Is Eagle Bancorp Montana not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here

Advertisement