Home Bancshares (Conway AR) (NYSE:HOMB) Is Paying Out A Dividend Of $0.18
The board of Home Bancshares, Inc. (Conway, AR) (NYSE:HOMB) has announced that it will pay a dividend on the 6th of March, with investors receiving $0.18 per share. This means the dividend yield will be fairly typical at 2.9%.
See our latest analysis for Home Bancshares (Conway AR)
Home Bancshares (Conway AR)'s Earnings Will Easily Cover The Distributions
While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.
Home Bancshares (Conway AR) 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 37%, which means that Home Bancshares (Conway AR) would be able to pay its last dividend without pressure on the balance sheet.
The next 3 years are set to see EPS grow by 1.3%. Analysts estimate the future payout ratio will be 36% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
Home Bancshares (Conway AR) Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.15, compared to the most recent full-year payment of $0.72. This implies that the company grew its distributions at a yearly rate of about 17% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
The Dividend's Growth Prospects Are Limited
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, Home Bancshares (Conway AR) has only grown its earnings per share at 2.4% per annum over the past five years. While growth may be thin on the ground, Home Bancshares (Conway AR) could always pay out a higher proportion of earnings to increase shareholder returns.
We Really Like Home Bancshares (Conway AR)'s Dividend
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Home Bancshares (Conway AR) that investors should take into consideration. Is Home Bancshares (Conway AR) 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.
