BankFinancial (NASDAQ:BFIN) Will Pay A Dividend Of $0.10

BankFinancial Corporation (NASDAQ:BFIN) will pay a dividend of $0.10 on the 23rd of August. Based on this payment, the dividend yield will be 3.4%, which is fairly typical for the industry.

Check out our latest analysis for BankFinancial

BankFinancial's Dividend Forecasted To Be Well Covered By Earnings

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Having distributed dividends for at least 10 years, BankFinancial has a long history of paying out a part of its earnings to shareholders. Based on BankFinancial's last earnings report, the payout ratio is at a decent 59%, meaning that the company is able to pay out its dividend with a bit of room to spare.

The next year is set to see EPS grow by 11.9%. If the dividend continues on this path, the future payout ratio could be 60% by next year, which we think can be pretty sustainable going forward.

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 implies that the company grew its distributions at a yearly rate of about 26% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

Dividend Growth May Be Hard To Come By

The company's investors will be pleased to have been receiving dividend income for some time. However, initial appearances might be deceiving. In the last five years, BankFinancial's earnings per share has shrunk at approximately 9.8% per annum. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits. 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 BankFinancial's Dividend

Overall, a consistent dividend is a good thing, and we think that BankFinancial has the ability to continue this into the future. With shrinking earnings, the company may see some issues maintaining the dividend even though they look pretty sustainable for now. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. See if management have their own wealth at stake, by checking insider shareholdings in BankFinancial stock. 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.

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