U.S. Markets closed
  • S&P 500

    4,397.94
    -84.79 (-1.89%)
     
  • Dow 30

    34,265.37
    -450.02 (-1.30%)
     
  • Nasdaq

    13,768.92
    -385.10 (-2.72%)
     
  • Russell 2000

    1,987.92
    -36.12 (-1.78%)
     
  • Crude Oil

    84.78
    -0.77 (-0.90%)
     
  • Gold

    1,833.60
    -9.00 (-0.49%)
     
  • Silver

    24.30
    -0.42 (-1.70%)
     
  • EUR/USD

    1.1346
    +0.0028 (+0.2496%)
     
  • 10-Yr Bond

    1.7470
    -0.0860 (-4.69%)
     
  • Vix

    28.85
    +3.26 (+12.74%)
     
  • GBP/USD

    1.3553
    -0.0047 (-0.3443%)
     
  • USD/JPY

    113.6850
    -0.4150 (-0.3637%)
     
  • BTC-USD

    37,507.13
    -4,337.64 (-10.37%)
     
  • CMC Crypto 200

    873.97
    +631.29 (+260.13%)
     
  • FTSE 100

    7,494.13
    -90.88 (-1.20%)
     
  • Nikkei 225

    27,522.26
    -250.64 (-0.90%)
     

Is It Smart To Buy BancFirst Corporation (NASDAQ:BANF) Before It Goes Ex-Dividend?

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • BANF

BancFirst Corporation (NASDAQ:BANF) stock is about to trade ex-dividend in 3 days time. You will need to purchase shares before the 30th of March to receive the dividend, which will be paid on the 15th of April.

BancFirst's next dividend payment will be US$0.32 per share. Last year, in total, the company distributed US$1.28 to shareholders. Last year's total dividend payments show that BancFirst has a trailing yield of 3.9% on the current share price of $32.5. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for BancFirst

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see BancFirst paying out a modest 30% of its earnings.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

NasdaqGS:BANF Historical Dividend Yield March 26th 2020
NasdaqGS:BANF Historical Dividend Yield March 26th 2020

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Fortunately for readers, BancFirst's earnings per share have been growing at 15% a year for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. BancFirst has delivered 11% dividend growth per year on average over the past ten years. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

Is BancFirst an attractive dividend stock, or better left on the shelf? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. BancFirst ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

On that note, you'll want to research what risks BancFirst is facing. For example, BancFirst has 2 warning signs (and 1 which is potentially serious) we think you should know about.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.