BayFirst Financial (NASDAQ:BAFN) Will Pay A Dividend Of $0.08

The board of BayFirst Financial Corp. (NASDAQ:BAFN) has announced that it will pay a dividend of $0.08 per share on the 15th of June. This means the annual payment will be 2.2% of the current stock price, which is lower than the industry average.

View our latest analysis for BayFirst Financial

BayFirst Financial's Dividend Forecasted To Be Well Covered By Earnings

Even a low dividend yield can be attractive if it is sustained for years on end.

Having paid out dividends for only 2 years, BayFirst Financial does not have much of a history being a dividend paying company. Based on its last earnings report however, the payout ratio is at a comfortable 17%, meaning that BayFirst Financial may be able to sustain this dividend for future years if it continues on this earnings trend.

Looking forward, earnings per share could rise by 1.6% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the future payout ratio will be 26%, which is in the range that makes us comfortable with the sustainability of the dividend.

BayFirst Financial 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 2 years, which isn't that long in the grand scheme of things. The dividend has gone from an annual total of $0.179 in 2021 to the most recent total annual payment of $0.32. This implies that the company grew its distributions at a yearly rate of about 34% over that duration. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

Dividend Growth May Be Hard To Achieve

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. BayFirst Financial hasn't seen much change in its earnings per share over the last five years. If BayFirst Financial is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

In Summary

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 3 warning signs for BayFirst Financial that investors need to be conscious of moving forward. Is BayFirst Financial 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.