Bank of the James Financial Group (NASDAQ:BOTJ) Will Pay A Dividend Of $0.10

Bank of the James Financial Group, Inc. (NASDAQ:BOTJ) will pay a dividend of $0.10 on the 21st of June. This takes the dividend yield to 4.0%, which shareholders will be pleased with.

See our latest analysis for Bank of the James Financial Group

Bank of the James Financial Group's Earnings Will Easily Cover The Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained.

Having distributed dividends for at least 10 years, Bank of the James Financial Group has a long history of paying out a part of its earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 18% 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 11.7% over the next 12 months. If the dividend continues on this path, the future payout ratio could be 18% by next year, which we think can be pretty sustainable going forward.

Bank of the James Financial Group Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2014, the annual payment back then was $0.182, compared to the most recent full-year payment of $0.40. This implies that the company grew its distributions at a yearly rate of about 8.2% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

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. Bank of the James Financial Group has impressed us by growing EPS at 12% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Bank of the James Financial Group Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Bank of the James Financial Group is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for Bank of the James Financial Group that you should be aware of before investing. Is Bank of the James Financial Group 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.