Hawthorn Bancshares' (NASDAQ:HWBK) Dividend Will Be $0.17
The board of Hawthorn Bancshares, Inc. (NASDAQ:HWBK) has announced that it will pay a dividend on the 1st of October, with investors receiving $0.17 per share. This means that the annual payment will be 3.7% of the current stock price, which is in line with the average for the industry.
Check out our latest analysis for Hawthorn Bancshares
Hawthorn Bancshares' Earnings Will Easily Cover The Distributions
We aren't too impressed by dividend yields unless they can be sustained over time.
Hawthorn Bancshares 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 30%, which means that Hawthorn Bancshares would be able to pay its last dividend without pressure on the balance sheet.
Looking forward, earnings per share could rise by 29.7% 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 28%, which is in the range that makes us comfortable with the sustainability of the dividend.
Hawthorn Bancshares Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.13 in 2013 to the most recent total annual payment of $0.654. This works out to be a compound annual growth rate (CAGR) of approximately 18% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. Hawthorn Bancshares has seen EPS rising for the last five years, at 30% per annum. 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.
Hawthorn Bancshares Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Hawthorn Bancshares might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Are management backing themselves to deliver performance? Check their shareholdings in Hawthorn Bancshares in our latest insider ownership analysis. Is Hawthorn Bancshares 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.
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