Veritex Holdings (NASDAQ:VBTX) Is Due To Pay A Dividend Of $0.20
The board of Veritex Holdings, Inc. (NASDAQ:VBTX) has announced that it will pay a dividend of $0.20 per share on the 24th of February. This means the dividend yield will be fairly typical at 2.9%.
View our latest analysis for Veritex Holdings
Veritex Holdings' Payment Expected To Have Solid Earnings Coverage
We aren't too impressed by dividend yields unless they can be sustained over time.
Having paid out dividends for only 4 years, Veritex Holdings does not have much of a history being a dividend paying company. Diving into the company's earnings report, the payout ratio is set at 29%, which is a decent ratio of dividend payout to earnings, and may sustain future dividends if the company stays at its current trend.
Looking forward, EPS is forecast to rise by 30.5% over the next 3 years. The future payout ratio could be 25% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Veritex Holdings Is Still Building Its Track Record
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 dividend has gone from an annual total of $0.50 in 2019 to the most recent total annual payment of $0.80. This means that it has been growing its distributions at 12% per annum over that time. 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
The company's investors will be pleased to have been receiving dividend income for some time. Veritex Holdings has seen EPS rising for the last five years, at 27% per annum. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.
We Really Like Veritex Holdings' Dividend
Overall, we like to see the dividend staying consistent, and we think Veritex Holdings might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.
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. Taking the debate a bit further, we've identified 2 warning signs for Veritex Holdings that investors need to be conscious of moving forward. 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.
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