Riverview Bancorp (NASDAQ:RVSB) Has Affirmed Its Dividend Of $0.06
Riverview Bancorp, Inc. (NASDAQ:RVSB) has announced that it will pay a dividend of $0.06 per share on the 23rd of October. This means that the annual payment will be 4.4% of the current stock price, which is in line with the average for the industry.
Check out our latest analysis for Riverview Bancorp
Riverview Bancorp's Dividend Forecasted To Be Well Covered By Earnings
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
Riverview Bancorp has established itself as a dividend paying company, given its 8-year history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Riverview Bancorp's payout ratio of 32% is a good sign for current shareholders as this means that earnings decently cover dividends.
EPS is set to fall by 30.1% over the next 12 months. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 53%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
Riverview Bancorp Is Still Building Its Track Record
Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. Since 2015, the dividend has gone from $0.045 total annually to $0.24. This implies that the company grew its distributions at a yearly rate of about 23% over that duration. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
The Dividend Has Growth Potential
Investors could be attracted to the stock based on the quality of its payment history. Riverview Bancorp has impressed us by growing EPS at 7.6% per year over the past five years. Riverview Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
In Summary
Overall, a consistent dividend is a good thing, and we think that Riverview Bancorp has the ability to continue this into the future. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 2 warning signs for Riverview Bancorp (1 is significant!) that you should be aware of before investing. 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.
