American River Bankshares (NASDAQ:AMRB) Has Affirmed Its Dividend Of US$0.07

American River Bankshares (NASDAQ:AMRB) will pay a dividend of US$0.07 on the 5th of August. Including this payment, the dividend yield on the stock will be 1.6%, which is a modest boost for shareholders' returns.

See our latest analysis for American River Bankshares

American River Bankshares' Earnings Easily Cover the Distributions

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock. However, prior to this announcement, American River Bankshares' dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to expand by 2.9%. Assuming the dividend continues along recent trends, we think the payout ratio could be 24% by next year, which is in a pretty sustainable range.

American River Bankshares Is Still Building Its Track Record

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2017, the first annual payment was US$0.20, compared to the most recent full-year payment of US$0.28. This means that it has been growing its distributions at 8.8% per annum over that time. American River Bankshares has a nice track record of dividend growth but we would wait until we see a longer track record before getting too confident.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. American River Bankshares has impressed us by growing EPS at 13% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for American River Bankshares' prospects of growing its dividend payments in the future.

American River Bankshares Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think American River Bankshares might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. Taking the debate a bit further, we've identified 1 warning sign for American River Bankshares that investors need to be conscious of moving forward. We have also put together a list of global stocks with a solid dividend.

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