Bank of the James Financial Group (NASDAQ:BOTJ) Is Due To Pay A Dividend Of $0.08

Bank of the James Financial Group, Inc. (NASDAQ:BOTJ) will pay a dividend of $0.08 on the 15th of September. Based on this payment, the dividend yield will be 3.0%, which is fairly typical for the industry.

Check out our latest analysis for Bank of the James Financial Group

Bank of the James Financial Group's Dividend Forecasted To Be Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Bank of the James Financial Group has established itself as a dividend paying company, given its 9-year history of distributing earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 16% also shows that Bank of the James Financial Group is able to comfortably pay dividends.

If the trend of the last few years continues, EPS will grow by 20.4% over the next 12 months. If the dividend continues along recent trends, we estimate the future payout ratio will be 14%, which is in the range that makes us comfortable with the sustainability of the dividend.

Bank of the James Financial Group Is Still Building Its Track Record

It is great to see that Bank of the James Financial Group has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2014, the annual payment back then was $0.182, compared to the most recent full-year payment of $0.32. This means that it has been growing its distributions at 6.5% per annum over that time. Bank of the James Financial Group has a nice track record of dividend growth but we would wait until we see a longer track record before getting too confident.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Bank of the James Financial Group has impressed us by growing EPS at 20% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

Bank of the James Financial Group 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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 2 warning signs for Bank of the James Financial Group that investors should take into consideration. 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.