HomeTrust Bancshares' (NASDAQ:HTBI) Shareholders Will Receive A Bigger Dividend Than Last Year

The board of HomeTrust Bancshares, Inc. (NASDAQ:HTBI) has announced that it will be paying its dividend of $0.10 on the 1st of December, an increased payment from last year's comparable dividend. Despite this raise, the dividend yield of 1.7% is only a modest boost to shareholder returns.

Check out our latest analysis for HomeTrust Bancshares

HomeTrust Bancshares' Dividend Forecasted To Be Well Covered By Earnings

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 16% shows that HomeTrust Bancshares is able to comfortably pay dividends.

Looking forward, EPS is forecast to rise by 29.3% over the next 3 years. Analysts forecast the future payout ratio could be 14% over the same time horizon, which is a number we think the company can maintain.

HomeTrust Bancshares Doesn't Have A Long Payment History

The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 4 years, which isn't that long in the grand scheme of things. Since 2018, the dividend has gone from $0.24 total annually to $0.40. This works out to be a compound annual growth rate (CAGR) of approximately 14% a year 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 23% 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.

HomeTrust Bancshares Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for HomeTrust Bancshares that investors should take into consideration. Is HomeTrust Bancshares 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.

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