Riverview Bancorp (NASDAQ:RVSB) Has Announced A Dividend Of $0.06
Riverview Bancorp, Inc. (NASDAQ:RVSB) has announced that it will pay a dividend of $0.06 per share on the 16th of January. This means that the annual payment will be 3.8% of the current stock price, which is in line with the average for the industry.
See our latest analysis for Riverview Bancorp
Riverview Bancorp's Dividend Forecasted To Be Well Covered By Earnings
Solid dividend yields are great, but they only really help us if the payment is sustainable.
Riverview Bancorp has a good history of paying out dividends, with its current track record at 9 years. Taking data from its last earnings report, calculating for the company's payout ratio of 38%shows that Riverview Bancorp would be able to pay its last dividend without pressure on the balance sheet.
Over the next year, EPS is forecast to fall by 37.0%. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 70%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
Riverview Bancorp Doesn't Have A Long Payment History
Riverview Bancorp'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 2014, the annual payment back then was $0.045, compared to the most recent full-year payment of $0.24. This implies that the company grew its distributions at a yearly rate of about 20% 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.
Dividend Growth May Be Hard To Achieve
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Although it's important to note that Riverview Bancorp's earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time. While EPS growth is quite low, Riverview Bancorp has the option to increase the payout ratio to return more cash to shareholders.
Our Thoughts On Riverview Bancorp's Dividend
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. However, there are other things to consider for investors when analysing stock performance. To that end, Riverview Bancorp has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about. 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.
