Investar Holding (NASDAQ:ISTR) Has Announced A Dividend Of $0.10
Investar Holding Corporation (NASDAQ:ISTR) has announced that it will pay a dividend of $0.10 per share on the 30th of April. This payment means the dividend yield will be 2.5%, which is below the average for the industry.
Check out our latest analysis for Investar Holding
Investar Holding's Earnings Will Easily Cover The Distributions
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.
Investar Holding 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 23% also shows that Investar Holding is able to comfortably pay dividends.
The next 3 years are set to see EPS grow by 27.6%. The future payout ratio could be 21% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Investar Holding Doesn't Have A Long Payment History
The dividend's track record has been pretty solid, but with only 9 years of history we want to see a few more years of history before making any solid conclusions. Since 2015, the dividend has gone from $0.0272 total annually to $0.40. This means that it has been growing its distributions at 35% per annum over that time. Investar Holding has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
The Dividend's Growth Prospects Are Limited
The company's investors will be pleased to have been receiving dividend income for some time. However, Investar Holding has only grown its earnings per share at 3.9% per annum over the past five years. If Investar Holding is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.
In Summary
Overall, we think Investar Holding is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. 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 picked out 2 warning signs for Investar Holding that investors should know about before committing capital to this stock. Is Investar Holding 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.
