Republic Bancorp (NASDAQ:RBCA.A) Has Announced That It Will Be Increasing Its Dividend To $0.407
Republic Bancorp, Inc. (NASDAQ:RBCA.A) has announced that it will be increasing its periodic dividend on the 19th of April to $0.407, which will be 8.8% higher than last year's comparable payment amount of $0.374. The payment will take the dividend yield to 2.8%, which is in line with the average for the industry.
See our latest analysis for Republic Bancorp
Republic Bancorp's Earnings Will Easily Cover The Distributions
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
Republic Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Republic Bancorp's last earnings report, the payout ratio is at a decent 33%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Looking forward, earnings per share could rise by 4.6% 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 34% by next year, which we think can be pretty sustainable going forward.
Republic Bancorp Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2014, the dividend has gone from $0.704 total annually to $1.5. This means that it has been growing its distributions at 7.8% per annum over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
The Dividend's Growth Prospects Are Limited
The company's investors will be pleased to have been receiving dividend income for some time. Earnings per share has been crawling upwards at 4.6% per year. If Republic Bancorp is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.
Republic Bancorp Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Republic Bancorp is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Republic Bancorp that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
