BankFinancial (NASDAQ:BFIN) Is Paying Out A Dividend Of $0.10

BankFinancial Corporation (NASDAQ:BFIN) has announced that it will pay a dividend of $0.10 per share on the 25th of August. This means the annual payment is 4.6% of the current stock price, which is above the average for the industry.

View our latest analysis for BankFinancial

BankFinancial's Dividend Forecasted To Be Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

BankFinancial has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but BankFinancial's payout ratio of 44% is a good sign as this means that earnings decently cover dividends.

Over the next year, EPS is forecast to expand by 2.9%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 50% by next year, which is in a pretty sustainable range.

BankFinancial Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2013, 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. 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 Has Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that BankFinancial has been growing its earnings per share at 5.3% a year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

BankFinancial Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. 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. Now, if you want to look closer, it would be worth checking out our free research on BankFinancial management tenure, salary, and performance. Is BankFinancial 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.