The board of BOK Financial Corporation (NASDAQ:BOKF) has announced that it will be paying its dividend of $0.53 on the 25th of August, an increased payment from last year's comparable dividend. Even though the dividend went up, the yield is still quite low at only 2.4%.
BOK Financial'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.
BOK Financial has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on BOK Financial's last earnings report, the payout ratio is at a decent 29%, 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 11.1%. If the dividend continues on this path, the future payout ratio could be 27% by next year, which we think can be pretty sustainable going forward.
BOK Financial Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $1.32 in 2012 to the most recent total annual payment of $2.12. This works out to be a compound annual growth rate (CAGR) of approximately 4.9% a year over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
We Could See BOK Financial's Dividend Growing
The company's investors will be pleased to have been receiving dividend income for some time. BOK Financial has seen EPS rising for the last five years, at 9.8% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
We Really Like BOK Financial's Dividend
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for BOK Financial that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
What are the risks and opportunities for BOK Financial?
Trading at 24.9% below our estimate of its fair value
Earnings are forecast to grow 7.11% per year
Significant insider selling over the past 3 months
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BOK Financial Corporation operates as the financial holding company for BOKF, NA that provides various financial products and services in Oklahoma, Texas, New Mexico, Northwest Arkansas, Colorado, Arizona, and Kansas/Missouri.
Excellent balance sheet established dividend payer.