BOK Financial's (NASDAQ:BOKF) Shareholders Will Receive A Bigger Dividend Than Last Year

BOK Financial Corporation (NASDAQ:BOKF) will increase its dividend from last year's comparable payment on the 26th of November to $0.63. Despite this raise, the dividend yield of 2.4% is only a modest boost to shareholder returns.

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BOK Financial's Payment Expected To Have Solid Earnings Coverage

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.

BOK Financial 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 BOK Financial's payout ratio of 28% is a good sign as this means that earnings decently cover dividends.

The next 3 years are set to see EPS grow by 17.4%. Analysts forecast the future payout ratio could be 25% over the same time horizon, which is a number we think the company can maintain.

View our latest analysis for BOK Financial

BOK Financial Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was $1.68 in 2015, and the most recent fiscal year payment was $2.52. This works out to be a compound annual growth rate (CAGR) of approximately 4.1% a year over that time. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

BOK Financial Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that BOK Financial has grown earnings per share at 8.6% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for BOK Financial's prospects of growing its dividend payments in the future.

BOK Financial Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that BOK Financial is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 9 BOK Financial analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is BOK Financial 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.