Investar Holding Corp's Dividend Analysis: A Deep Dive into its Performance and Sustainability
An in-depth look at ISTR's dividend history, yield, growth rates, and future prospects
Investar Holding Corp (NASDAQ:ISTR) recently announced a dividend of $0.1 per share, payable on October 31, 2023, with the ex-dividend date set for September 29, 2023. As investors anticipate this upcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. This article, powered by GuruFocus data, provides a comprehensive analysis of Investar Holding Corp's dividend performance and evaluates its sustainability.
Introduction to Investar Holding Corp
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Investar Holding Corp is a US-based financial holding company. It offers a variety of commercial and retail lending products through its subsidiaries, catering to small to medium-sized businesses and individuals. The company has a broad presence across the United States and serves its customers through multiple service branches. Its offerings include cashiers' checks, direct deposit of payroll and Social Security checks, night depository, bank-by-mail, automated teller machines with deposit automation, and debit cards.
Investar Holding Corp's Dividend History
Investar Holding Corp has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a quarterly basis. The chart below provides a glimpse into the annual Dividends Per Share for tracking historical trends.
Understanding Investar Holding Corp's Dividend Yield and Growth
Currently, Investar Holding Corp has a 12-month trailing dividend yield of 3.56% and a 12-month forward dividend yield of 3.71%. This indicates an expectation of increased dividend payments over the next 12 months.
Investar Holding Corp's dividend yield of 3.56% is near a 10-year high and outperforms 41.72% of global competitors in the Banks industry, suggesting that the company's dividend yield is a compelling proposition for income investors.
Over the past three years, Investar Holding Corp's annual dividend growth rate was 17.00%. Extended to a five-year horizon, this rate increased to 26.30% per year. Consequently, the 5-year yield on cost of Investar Holding Corp stock as of today is approximately 11.44%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The sustainability of a dividend is gauged by evaluating the company's payout ratio. The dividend payout ratio reveals the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of June 30, 2023, Investar Holding Corp's dividend payout ratio stands at 0.14.
Investar Holding Corp's profitability rank provides an understanding of the company's earnings prowess relative to its peers. As of June 30, 2023, GuruFocus ranks Investar Holding Corp's profitability at 6 out of 10, suggesting fair profitability. The company has reported positive net income each year over the past decade, further solidifying its high profitability.
Investar Holding Corp's Growth Metrics and Future Outlook
A company must have robust growth metrics to ensure the sustainability of dividends. Investar Holding Corp's growth rank of 6 out of 10 suggests a fair growth outlook. The company's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Investar Holding Corp's revenue has increased by approximately 14.60% per year on average, a rate that outperforms approximately 81.24% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Investar Holding Corp's earnings increased by approximately 28.20% per year on average, a rate that outperforms approximately 84.09% of global competitors.
Lastly, the company's 5-year EBITDA growth rate stands at 13.40%, which outperforms approximately 66.41% of global competitors.
Conclusion
Investar Holding Corp's consistent dividend payments, impressive growth rate, low payout ratio, and strong profitability and growth metrics make it a compelling proposition for income-focused investors. While past performance is not a guarantee of future results, these factors suggest a positive outlook for the company's ability to sustain and potentially increase its dividend payments. As always, investors are encouraged to conduct their own comprehensive analysis before making investment decisions.
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This article first appeared on GuruFocus.
