BankFinancial (NASDAQ:BFIN) Has Affirmed Its Dividend Of $0.10

BankFinancial Corporation's (NASDAQ:BFIN) investors are due to receive a payment of $0.10 per share on 23rd of February. This payment means that the dividend yield will be 3.7%, which is around the industry average.

See our latest analysis for BankFinancial

BankFinancial's Dividend Forecasted To Be Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

BankFinancial has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on BankFinancial's last earnings report, the payout ratio is at a decent 47%, meaning that the company is able to pay out its dividend with a bit of room to spare.

The next 3 years are set to see EPS grow by 10.5%. Analysts estimate the future payout ratio will be 46% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

BankFinancial 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 $0.04, compared to the most recent full-year payment of $0.40. This means that it has been growing its distributions at 26% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

BankFinancial May Find It Hard To Grow The Dividend

Investors could be attracted to the stock based on the quality of its payment history. Earnings have grown at around 3.4% a year for the past five years, which isn't massive but still better than seeing them shrink. Growth of 3.4% per annum is not particularly high, which might explain why the company is paying out a higher proportion of earnings. This isn't necessarily bad, but we wouldn't expect rapid dividend growth in the future.

We Really Like BankFinancial'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. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Are management backing themselves to deliver performance? Check their shareholdings in BankFinancial in our latest insider ownership analysis. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.