BCB Bancorp (NASDAQ:BCBP) Is Due To Pay A Dividend Of $0.16

The board of BCB Bancorp, Inc. (NASDAQ:BCBP) has announced that it will pay a dividend on the 24th of February, with investors receiving $0.16 per share. This makes the dividend yield 5.9%, which will augment investor returns quite nicely.

View our latest analysis for BCB Bancorp

BCB Bancorp's Payment Expected To Have Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much.

BCB Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 65%, which means that BCB Bancorp would be able to pay its last dividend without pressure on the balance sheet.

The next 3 years are set to see EPS grow by 92.7%. Analysts forecast the future payout ratio could be 40% over the same time horizon, which is a number we think the company can maintain.

BCB Bancorp Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $0.56 in 2015 to the most recent total annual payment of $0.64. This implies that the company grew its distributions at a yearly rate of about 1.3% over that duration. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

The Dividend's Growth Prospects Are Limited

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, things aren't all that rosy. Over the past five years, it looks as though BCB Bancorp's EPS has declined at around 3.9% a year. If earnings continue declining, the company may have to make the difficult choice of reducing the dividend or even stopping it completely - the opposite of dividend growth. It's not all bad news though, as the earnings are predicted to rise over the next 12 months - we would just be a bit cautious until this can turn into a longer term trend.

Our Thoughts On BCB Bancorp's Dividend

Overall, a consistent dividend is a good thing, and we think that BCB Bancorp has the ability to continue this into the future. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for BCB Bancorp that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.