Republic Bancorp (NASDAQ:RBCA.A) Is Paying Out A Larger Dividend Than Last Year
Republic Bancorp, Inc.'s (NASDAQ:RBCA.A) dividend will be increasing from last year's payment of the same period to $0.374 on 21st of April. Based on this payment, the dividend yield for the company will be 3.3%, which is fairly typical for the industry.
See our latest analysis for Republic Bancorp
Republic Bancorp's Payment Expected To Have Solid Earnings Coverage
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.
Republic Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Republic Bancorp's payout ratio of 30% is a good sign as this means that earnings decently cover dividends.
Looking forward, earnings per share is forecast to fall by 0.6% over the next 3 years. Fortunately, analysts forecast the future payout ratio to be 32% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.
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. The annual payment during the last 10 years was $0.66 in 2013, and the most recent fiscal year payment was $1.5. This means that it has been growing its distributions at 8.5% per annum over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that Republic Bancorp has grown earnings per share at 16% per year over the past five years. Republic Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Republic Bancorp Looks Like A Great Dividend Stock
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. 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. Taking the debate a bit further, we've identified 1 warning sign for Republic Bancorp that investors need to be conscious of moving forward. 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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