William Penn Bancorporation's Dividend Analysis
Understanding the Sustainability of Dividends Amid Financial Performance
William Penn Bancorporation (NASDAQ:WMPN) recently announced a dividend of $0.03 per share, payable on 2023-11-09, with the ex-dividend date set for 2023-10-27. As investors anticipate this upcoming payment, it's crucial to evaluate the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into William Penn Bancorporation's dividend performance and assess its sustainability.
About William Penn Bancorporation
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William Penn Bancorporation functions as an independent community financial services provider. The bank offers traditional banking and related financial services to individual, business, and government customers. Through its branch and automated teller machine network, the bank provides a full array of commercial and retail financial services, including time, savings, and demand deposits; commercial, consumer, and mortgage loans; and other financial services.
William Penn Bancorporation's Dividend History
William Penn Bancorporation has maintained a consistent dividend payment record since 2011, with dividends currently distributed on a quarterly basis. The chart below presents the annual Dividends Per Share for historical trend tracking.
William Penn Bancorporation's Dividend Yield and Growth
As of today, William Penn Bancorporation has a 12-month trailing dividend yield of 1.00% and a 12-month forward dividend yield of 1.00%, indicating an expectation of consistent dividend payments over the next 12 months. Over the past three years, the company's annual dividend growth rate was -33.10%, which increased to -24.30% per year over a five-year horizon. Consequently, the 5-year yield on cost of William Penn Bancorporation stock is approximately 0.25% as of today.
Payout Ratio and Profitability: Assessing Dividend Sustainability
The sustainability of a dividend can be evaluated by scrutinizing the company's payout ratio. The dividend payout ratio offers insights into the earnings portion that the company distributes as dividends. A lower ratio suggests a significant retention of earnings, ensuring funds for future growth and unexpected downturns. As of 2023-06-30, William Penn Bancorporation's dividend payout ratio is 0.55.
William Penn Bancorporation's profitability rank of 4 out of 10 as of 2023-06-30, coupled with a decade of positive net income, suggests the dividend may not be sustainable.
Growth Metrics: The Future Outlook
Robust growth metrics are necessary for dividend sustainability. William Penn Bancorporation's growth rank of 4 out of 10 suggests poor growth prospects, which might affect the sustainability of dividends. However, the company's revenue per share and 3-year revenue growth rate of approximately 16.60% per year outperform about 86.08% of global competitors, indicating a strong revenue model.
The company's 3-year EPS growth rate of approximately 30.10% per year outperforms about 86.36% of global competitors, showcasing its potential to grow its earnings, a crucial component for sustaining dividends in the long run. However, the company's 5-year EBITDA growth rate of -15.00% outperforms only about 3.64% of global competitors.
Conclusion
While William Penn Bancorporation has a consistent dividend payment record, the sustainability of its dividends remains uncertain due to its low profitability and growth ranks. However, its strong revenue model and EPS growth rate offer some optimism. Investors should carefully consider these factors before making investment decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
