Westamerica Bancorporation (NASDAQ:WABC) Is Paying Out A Dividend Of $0.42
The board of Westamerica Bancorporation (NASDAQ:WABC) has announced that it will pay a dividend on the 19th of May, with investors receiving $0.42 per share. This payment means that the dividend yield will be 4.2%, which is around the industry average.
Check out our latest analysis for Westamerica Bancorporation
Westamerica Bancorporation's Dividend Forecasted To Be Well Covered By Earnings
We aren't too impressed by dividend yields unless they can be sustained over time.
Having distributed dividends for at least 10 years, Westamerica Bancorporation has a long history of paying out a part of its earnings to shareholders. Based on Westamerica Bancorporation's last earnings report, the payout ratio is at a decent 32%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Over the next year, EPS is forecast to fall by 0.5%. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 33%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
Westamerica Bancorporation Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the dividend has gone from $1.48 total annually to $1.68. This works out to be a compound annual growth rate (CAGR) of approximately 1.3% a year over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Westamerica Bancorporation has grown earnings per share at 21% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.
Westamerica Bancorporation Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Westamerica Bancorporation might even raise payments in the future. 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. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Westamerica Bancorporation that investors should know about before committing capital to this stock. 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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