Bank First (NASDAQ:BFC) Has Announced That It Will Be Increasing Its Dividend To $0.45

Bank First Corporation (NASDAQ:BFC) has announced that it will be increasing its dividend from last year's comparable payment on the 6th of January to $0.45. Even though the dividend went up, the yield is still quite low at only 1.9%.

Check out our latest analysis for Bank First

Bank First's Dividend Forecasted To Be Well Covered By Earnings

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

Having distributed dividends for at least 10 years, Bank First has a long history of paying out a part of its earnings to shareholders. Using data from its latest earnings report, Bank First's payout ratio sits at 17%, an extremely comfortable number that shows that it can pay its dividend.

Over the next year, EPS is forecast to fall by 2.3%. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 21%, which we are pretty comfortable with and we think would be feasible on an earnings basis.

Bank First Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the dividend has gone from $0.44 total annually to $1.80. This works out to be a compound annual growth rate (CAGR) of approximately 15% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

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. Bank First has impressed us by growing EPS at 17% per year over the past five years. Bank First definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Bank First Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The earnings easily cover the company's distributions, and the company is generating plenty of cash. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. 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. For instance, we've picked out 1 warning sign for Bank First that investors should take into consideration. 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.