Bank of the James Financial Group (NASDAQ:BOTJ) Is Paying Out A Dividend Of $0.08

The board of Bank of the James Financial Group, Inc. (NASDAQ:BOTJ) has announced that it will pay a dividend of $0.08 per share on the 15th of September. This payment means the dividend yield will be 2.9%, which is below the average for the industry.

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

Bank of the James Financial Group's Payment Expected To Have Solid Earnings Coverage

If it is predictable over a long period, even low dividend yields can be attractive.

Bank of the James Financial Group has a good history of paying out dividends, with its current track record at 9 years. 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 on this path, the future payout ratio could be 14% by next year, which we think can be pretty sustainable going forward.

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

The dividend's track record has been pretty solid, but with only 9 years of history we want to see a few more years of history before making any solid conclusions. The annual payment during the last 9 years was $0.182 in 2014, and the most recent fiscal year payment was $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

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that Bank of the James Financial Group has been growing its earnings per share at 20% a year over the past five years. Earnings per share is growing at a solid clip, and the payout ratio is low which we think is an ideal combination in a dividend stock as the company can quite easily raise the dividend in the future.

We Really Like Bank of the James Financial Group's Dividend

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. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 2 warning signs for Bank of the James Financial Group that investors should know about before committing capital to this 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.