Home Bancorp's (NASDAQ:HBCP) Shareholders Will Receive A Bigger Dividend Than Last Year
Home Bancorp, Inc.'s (NASDAQ:HBCP) dividend will be increasing from last year's payment of the same period to $0.24 on 10th of November. Although the dividend is now higher, the yield is only 2.4%, which is below the industry average.
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 a good history of paying out dividends, with its current track record at 8 years. While past data isn't a guarantee for the future, Home Bancorp's latest earnings report puts its payout ratio at 22%, showing that the company can pay out its dividends comfortably.
Over the next 3 years, EPS is forecast to expand by 47.0%. The future payout ratio could be 20% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Home Bancorp Is Still Building Its Track Record
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 2014, the dividend has gone from $0.28 total annually to $0.96. This implies that the company grew its distributions at a yearly rate of about 17% over that duration. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
Home Bancorp Could Grow Its Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Home Bancorp has grown earnings per share at 9.5% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
We Really Like Home Bancorp's Dividend
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
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. As an example, we've identified 2 warning signs for Home Bancorp that you should be aware of before investing. 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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