Northrim BanCorp (NASDAQ:NRIM) Is Increasing Its Dividend To $0.61
Northrim BanCorp, Inc.'s (NASDAQ:NRIM) periodic dividend will be increasing on the 15th of March to $0.61, with investors receiving 1.7% more than last year's $0.60. This takes the dividend yield to 4.4%, which shareholders will be pleased with.
While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Northrim BanCorp's stock price has increased by 31% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.
See our latest analysis for Northrim BanCorp
Northrim BanCorp's Dividend Forecasted To Be Well Covered By Earnings
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Having distributed dividends for at least 10 years, Northrim BanCorp has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 53%, which means that Northrim BanCorp would be able to pay its last dividend without pressure on the balance sheet.
Looking forward, earnings per share could rise by 9.6% over the next year if the trend from the last few years continues. If the dividend continues on this path, the future payout ratio could be 54% by next year, which we think can be pretty sustainable going forward.
Northrim BanCorp Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was $0.60, compared to the most recent full-year payment of $2.40. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
We Could See Northrim BanCorp's Dividend Growing
The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Northrim BanCorp has been growing its earnings per share at 9.6% a year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.
Northrim BanCorp Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Northrim BanCorp is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.
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. Are management backing themselves to deliver performance? Check their shareholdings in Northrim BanCorp in our latest insider ownership analysis. 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.
