Luther Burbank (NASDAQ:LBC) Will Pay A Dividend Of $0.12
The board of Luther Burbank Corporation (NASDAQ:LBC) has announced that it will pay a dividend of $0.12 per share on the 15th of August. The dividend yield is 3.6% based on this payment, which is a little bit low compared to the other companies in the industry.
See our latest analysis for Luther Burbank
Luther Burbank's Dividend Forecasted To Be Well Covered By Earnings
Even a low dividend yield can be attractive if it is sustained for years on end.
Having paid out dividends for 5 years, Luther Burbank has a good history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Luther Burbank's payout ratio of 26% is a good sign for current shareholders as this means that earnings decently cover dividends.
Looking forward, earnings per share is forecast to fall by 25.1% over the next year. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 34%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
Luther Burbank Doesn't Have A Long Payment History
Luther Burbank's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2017, the dividend has gone from $0.23 total annually to $0.48. This means that it has been growing its distributions at 16% per annum 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.
We Could See Luther Burbank's Dividend Growing
Investors could be attracted to the stock based on the quality of its payment history. Luther Burbank has seen EPS rising for the last five years, at 5.4% per annum. Luther Burbank definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Our Thoughts On Luther Burbank's Dividend
Overall, we think Luther Burbank 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. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic 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 identified 3 warning signs for Luther Burbank (1 can't be ignored!) that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield 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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