BayCom (NASDAQ:BCML) Is Paying Out A Dividend Of $0.10

The board of BayCom Corp (NASDAQ:BCML) has announced that it will pay a dividend of $0.10 per share on the 10th of October. The dividend yield is 1.7% based on this payment, which is a little bit low compared to the other companies in the industry.

View our latest analysis for BayCom

BayCom's Payment Expected To Have Solid Earnings Coverage

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

Having paid out dividends for only 3 years, BayCom 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 19%, meaning that BayCom may be able to sustain this dividend for future years if it continues on this earnings trend.

EPS is set to fall by 1.0% over the next 12 months. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 18%, which we are pretty comfortable with and we think would be feasible on an earnings basis.

BayCom Is Still Building Its Track Record

The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 3 years, which isn't that long in the grand scheme of things. The dividend has gone from an annual total of $0.20 in 2021 to the most recent total annual payment of $0.40. This works out to be a compound annual growth rate (CAGR) of approximately 26% a year over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. BayCom has seen EPS rising for the last five years, at 13% per annum. BayCom definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like BayCom's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 2 warning signs for BayCom (1 is significant!) that you should be aware of before investing. Is BayCom 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.