Veritex Holdings (NASDAQ:VBTX) Has Announced A Dividend Of $0.20
Veritex Holdings, Inc. (NASDAQ:VBTX) has announced that it will pay a dividend of $0.20 per share on the 25th of August. Based on this payment, the dividend yield will be 3.7%, which is fairly typical for the industry.
See our latest analysis for Veritex Holdings
Veritex Holdings' Earnings Will Easily Cover The Distributions
While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.
Veritex Holdings has a short history of paying out dividends, with its current track record at only 4 years. Diving into the company's earnings report, the payout ratio is set at 28%, which is a decent ratio of dividend payout to earnings, and may sustain future dividends if the company stays at its current trend.
EPS is set to fall by 2.9% over the next 12 months. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 35%, which would be comfortable for the company to continue in the future.
Veritex Holdings Doesn't Have A Long Payment History
Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. The annual payment during the last 4 years was $0.50 in 2019, and the most recent fiscal year payment was $0.80. This implies that the company grew its distributions at a yearly rate of about 12% 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 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. Veritex Holdings has impressed us by growing EPS at 18% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Veritex Holdings' prospects of growing its dividend payments in the future.
Veritex Holdings 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 company is generating plenty of cash, and the earnings also quite easily cover the distributions. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Case in point: We've spotted 2 warning signs for Veritex Holdings (of which 1 is a bit concerning!) you should know about. Is Veritex Holdings not quite the opportunity you were looking for? Why not check out our selection of top 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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