Riverview Bancorp (NASDAQ:RVSB) Is Due To Pay 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 24th of July. Based on this payment, the dividend yield on the company's stock will be 4.7%, which is an attractive boost to shareholder returns.
See our latest analysis for Riverview Bancorp
Riverview Bancorp's Earnings Will Easily Cover The Distributions
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
Riverview Bancorp has a good history of paying out dividends, with its current track record at 8 years. Taking data from its last earnings report, calculating for the company's payout ratio of 29%shows that Riverview Bancorp would be able to pay its last dividend without pressure on the balance sheet.
Looking forward, earnings per share is forecast to fall by 52.6% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 50% over the same time period, which is in a pretty comfortable range.
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 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 23% over that duration. Riverview Bancorp has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Riverview Bancorp has seen EPS rising for the last five years, at 13% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
Riverview Bancorp Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. 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. All of these factors considered, we think this has solid potential as a dividend stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Case in point: We've spotted 2 warning signs for Riverview Bancorp (of which 1 makes us a bit uncomfortable!) you should know about. 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.
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