Bank of Marin Bancorp (NASDAQ:BMRC) Is Paying Out A Dividend Of $0.25

Bank of Marin Bancorp (NASDAQ:BMRC) has announced that it will pay a dividend of $0.25 per share on the 10th of November. The dividend yield will be 6.0% based on this payment which is still above the industry average.

View our latest analysis for Bank of Marin Bancorp

Bank of Marin Bancorp's Payment Expected To Have Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much.

Bank of Marin Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 50%, which means that Bank of Marin Bancorp would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, earnings per share is forecast to fall by 27.3% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 67% over the same time period, which is in a pretty comfortable range.

Bank of Marin Bancorp Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the dividend has gone from $0.36 total annually to $1.00. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

Bank of Marin Bancorp May Find It Hard To Grow The Dividend

Investors could be attracted to the stock based on the quality of its payment history. However, Bank of Marin Bancorp has only grown its earnings per share at 2.6% per annum over the past five years. Bank of Marin Bancorp is struggling to find viable investments, so it is returning more to shareholders. This could mean the dividend doesn't have the growth potential we look for going into the future.

Our Thoughts On Bank of Marin Bancorp's Dividend

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Bank of Marin Bancorp's payments, as there could be some issues with sustaining them into the future. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. We don't think Bank of Marin Bancorp is a great stock to add to your portfolio if income is your focus.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Bank of Marin Bancorp that investors need to be conscious of moving forward. Is Bank of Marin Bancorp 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.