Veritex Holdings (NASDAQ:VBTX) Is Paying Out A Dividend Of $0.20
Veritex Holdings, Inc.'s (NASDAQ:VBTX) investors are due to receive a payment of $0.20 per share on 23rd of February. This means the dividend yield will be fairly typical at 3.7%.
Check out our latest analysis for Veritex Holdings
Veritex Holdings' Dividend Forecasted To Be Well Covered By Earnings
While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.
Having paid out dividends for 5 years, Veritex Holdings has a good history of paying out a part of its earnings to shareholders. Based on Veritex Holdings' last earnings report, the payout ratio is at a decent 40%, meaning that the company is able to pay out its dividend with a bit of room to spare.
The next 3 years are set to see EPS grow by 21.0%. Analysts forecast the future payout ratio could be 36% over the same time horizon, which is a number we think the company can maintain.
Veritex Holdings Doesn't Have A Long Payment History
The dividend's track record has been pretty solid, but with only 5 years of history we want to see a few more years of history before making any solid conclusions. Since 2019, the annual payment back then was $0.50, compared to the most recent full-year payment of $0.80. This implies that the company grew its distributions at a yearly rate of about 9.9% over that duration. Investors will likely want to see a longer track record of growth before making decision to add this to their income portfolio.
The Dividend's Growth Prospects Are Limited
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Earnings has been rising at 4.1% per annum over the last five years, which admittedly is a bit slow. Veritex Holdings is struggling to find viable investments, so it is returning more to shareholders. This could mean the dividend doesn't have the growth potential we look for going into the future.
In Summary
In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Veritex Holdings that you should be aware of before investing. 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.
