HomeTrust Bancshares, Inc. (NASDAQ:HTBI) has announced that it will pay a dividend of $0.09 per share on the 1st of September. This means the annual payment will be 1.4% of the current stock price, which is lower than the industry average.
HomeTrust Bancshares' Dividend Forecasted To Be Well Covered By Earnings
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.
HomeTrust Bancshares has a short history of paying out dividends, with its current track record at only 4 years. Based on its last earnings report however, the payout ratio is at a comfortable 15%, meaning that HomeTrust Bancshares may be able to sustain this dividend for future years if it continues on this earnings trend.
The next 3 years are set to see EPS grow by 22.3%. The future payout ratio could be 13% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
HomeTrust Bancshares Is Still Building Its Track Record
The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. The dividend has gone from an annual total of $0.24 in 2018 to the most recent total annual payment of $0.36. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. HomeTrust Bancshares has seen EPS rising for the last five years, at 28% 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.
We Really Like HomeTrust Bancshares' 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. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 3 analysts we track are forecasting for HomeTrust Bancshares for free with public analyst estimates for the company. Is HomeTrust 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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