BancFirst (NASDAQ:BANF) Will Pay A Dividend Of $0.43

BancFirst Corporation's (NASDAQ:BANF) investors are due to receive a payment of $0.43 per share on 15th of April. Although the dividend is now higher, the yield is only 2.0%, which is below the industry average.

See our latest analysis for BancFirst

BancFirst's Dividend Forecasted To Be Well Covered By Earnings

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.

BancFirst has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 26%, which means that BancFirst would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, earnings per share is forecast to fall by 28.0% over the next 3 years. However, as estimated by analysts, the future payout ratio could be 35% over the same time period, which we think the company can easily maintain.

BancFirst Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was $0.58, compared to the most recent full-year payment of $1.72. This means that it has been growing its distributions at 11% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

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 BancFirst has grown earnings per share at 11% per year over the past five years. BancFirst definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like BancFirst's Dividend

Overall, a dividend increase is always good, and we think that BancFirst is a strong income stock thanks to its track record and growing earnings. The earnings easily cover the company's distributions, and the company is generating plenty of cash. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. To that end, BancFirst has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about. If you are a dividend investor, you might also want to look at our curated list of high yield 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.