In This Article:
Bank First Corporation (NASDAQ:BFC) will increase its dividend on the 9th of October to $0.40, which is 33% higher than last year's payment from the same period of $0.30. This takes the annual payment to 1.8% of the current stock price, which unfortunately is below what the industry is paying.
See our latest analysis for Bank First
Bank First's Dividend Forecasted To Be Well Covered By Earnings
If it is predictable over a long period, even low dividend yields can be attractive.
Having distributed dividends for at least 10 years, Bank First has a long history of paying out a part of its earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 16% also shows that Bank First is able to comfortably pay dividends.
Over the next year, EPS is forecast to fall by 13.4%. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 22%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
Bank First Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from $0.44 total annually to $1.60. This works out to be a compound annual growth rate (CAGR) of approximately 14% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Bank First has been growing its earnings per share at 17% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
Bank First Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Bank First is a strong income stock thanks to its track record and growing earnings. The earnings easily cover the company's distributions, and the company is generating plenty of cash. 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 of these factors considered, we think this has solid potential as a dividend 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. For example, we've picked out 1 warning sign for Bank First that investors should know about before committing capital to this stock. Is Bank First not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.