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

BayFirst Financial Corp.'s (NASDAQ:BAFN) investors are due to receive a payment of $0.08 per share on 15th of June. The dividend yield is 2.1% based on this payment, which is a little bit low compared to the other companies in the industry.

Our free stock report includes 2 warning signs investors should be aware of before investing in BayFirst Financial. Read for free now.

BayFirst Financial's Earnings Will 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.

BayFirst Financial is just starting to establish itself as being able to pay dividends to shareholders, given its short 4-year history of distributing earnings. Based on its last earnings report however, the payout ratio is at a comfortable 14%, meaning that BayFirst Financial may be able to sustain this dividend for future years if it continues on this earnings trend.

If the trend of the last few years continues, EPS will grow by 13.6% over the next 12 months. If the dividend continues along recent trends, we estimate the future payout ratio will be 13%, which is in the range that makes us comfortable with the sustainability of the dividend.

View our latest analysis for BayFirst Financial

BayFirst Financial Is Still Building Its Track Record

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. 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 16% over that duration. BayFirst Financial 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. BayFirst Financial has seen EPS rising for the last five years, at 14% per annum. BayFirst Financial definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

BayFirst Financial Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think BayFirst Financial might even raise payments in the future. 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.

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. To that end, BayFirst Financial has 2 warning signs (and 1 which can't be ignored) we think you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.