Home Bancorp (NASDAQ:HBCP) Is Paying Out A Dividend Of $0.25
Home Bancorp, Inc.'s (NASDAQ:HBCP) investors are due to receive a payment of $0.25 per share on 16th of February. This payment means the dividend yield will be 2.4%, which is below the average for the industry.
Check out our latest analysis for Home Bancorp
Home Bancorp's Payment Expected To Have Solid Earnings Coverage
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.
Home Bancorp has established itself as a dividend paying company, given its 9-year history of distributing earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 19% also shows that Home Bancorp is able to comfortably pay dividends.
Over the next 3 years, EPS is forecast to fall by 23.9%. However, as estimated by analysts, the future payout ratio could be 24% over the same time period, which we think the company can easily maintain.
Home Bancorp Doesn't Have A Long Payment History
It is great to see that Home Bancorp has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2015, the dividend has gone from $0.28 total annually to $1.00. This means that it has been growing its distributions at 15% per annum over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
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. Home Bancorp has impressed us by growing EPS at 11% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Home Bancorp's prospects of growing its dividend payments in the future.
We Really Like Home Bancorp's Dividend
Overall, we like to see the dividend staying consistent, and we think Home Bancorp might even raise payments in the future. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All in all, this checks a lot of the boxes we look for when choosing an income stock.
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. For example, we've identified 2 warning signs for Home Bancorp (1 can't be ignored!) that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield 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.
