HomeTrust Bancshares, Inc.'s (NASDAQ:HTBI) investors are due to receive a payment of $0.09 per share on 1st of September. This means the annual payment will be 1.5% of the current stock price, which is lower than the industry average.

View our latest analysis for HomeTrust Bancshares

HomeTrust Bancshares' Earnings Will Easily Cover The Distributions

If it is predictable over a long period, even low dividend yields can be attractive.

Having paid out dividends for only 4 years, HomeTrust Bancshares does not have much of a history being a dividend paying company. Despite the company's shorter dividend history however, calculating for its payout ratio of 15% shows that HomeTrust Bancshares is able to comfortably pay dividends.

Over the next 3 years, EPS is forecast to expand by 4.0%. Analysts estimate the future payout ratio will be 15% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

HomeTrust Bancshares 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. Since 2018, the annual payment back then was $0.24, compared to the most recent full-year payment of $0.36. This means that it has been growing its distributions at 11% per annum over that time. HomeTrust Bancshares has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

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 HomeTrust Bancshares has grown earnings per share at 28% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

We Really Like HomeTrust Bancshares' Dividend

Overall, we like to see the dividend staying consistent, and we think HomeTrust Bancshares might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 3 analysts we track are forecasting for HomeTrust Bancshares for free with public analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.