Amerant Bancorp Inc. (NASDAQ:AMTB) will pay a dividend of $0.09 on the 28th of February. Including this payment, the dividend yield on the stock will be 1.3%, which is a modest boost for shareholders' returns.
See our latest analysis for Amerant Bancorp
Amerant Bancorp's Payment Expected To Have Solid Earnings Coverage
Even a low dividend yield can be attractive if it is sustained for years on end.
Currently, Amerant Bancorp does not yet have a history of paying dividends out, with this being its first year doing so. Based on Amerant Bancorp's last earnings report however, the payout ratio is at a comfortable 19%, meaning that the company may be able to sustain this dividend for future years if it continues on this earnings trend.
Over the next 3 years, EPS is forecast to expand by 74.6%. Analysts estimate the future payout ratio will be 14% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
Amerant Bancorp Is Still Building Its Track Record
It's not possible for us to make a backward looking judgement just based on a short payment history. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Amerant Bancorp has grown earnings per share at 13% per year over the past five years. Amerant Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Amerant Bancorp Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 2 warning signs for Amerant Bancorp that investors need to be conscious of moving forward. Is Amerant Bancorp 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.
About NYSE:AMTB
Amerant Bancorp
Operates as the bank holding company for Amerant Bank, N.A.
High growth potential with excellent balance sheet.
