BancFirst (NASDAQ:BANF) Will Pay A Larger Dividend Than Last Year At $0.49

The board of BancFirst Corporation (NASDAQ:BANF) has announced that it will be increasing its dividend by 6.5% on the 15th of October to $0.49, up from last year's comparable payment of $0.46. This takes the annual payment to 1.4% of the current stock price, which unfortunately is below what the industry is paying.

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BancFirst's Dividend Forecasted To Be Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive.

Having distributed dividends for at least 10 years, BancFirst has a long history of paying out a part of its 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.

Over the next year, EPS is forecast to expand by 0.7%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 29% by next year, which is in a pretty sustainable range.

See our latest analysis for BancFirst

BancFirst Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was $0.68, compared to the most recent full-year payment of $1.84. This works out to be a compound annual growth rate (CAGR) of approximately 10% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. BancFirst has seen EPS rising for the last five years, at 15% per annum. BancFirst definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

BancFirst Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 3 BancFirst analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is BancFirst 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.