Bank of the James Financial Group's (NASDAQ:BOTJ) Dividend Will Be $0.07

Bank of the James Financial Group, Inc.'s (NASDAQ:BOTJ) investors are due to receive a payment of $0.07 per share on 16th of September. This means the annual payment will be 2.2% of the current stock price, which is lower than the industry average.

View 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

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

Bank of the James Financial Group has a good history of paying out dividends, with its current track record at 8 years. While past data isn't a guarantee for the future, Bank of the James Financial Group's latest earnings report puts its payout ratio at 16%, showing that the company can pay out its dividends comfortably.

If the trend of the last few years continues, EPS will grow by 23.6% over the next 12 months. Assuming the dividend continues along recent trends, we think the future payout ratio could be 14% by next year, which is in a pretty sustainable range.

Bank of the James Financial Group Doesn't Have A Long Payment History

Bank of the James Financial Group's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2014, the annual payment back then was $0.182, compared to the most recent full-year payment of $0.28. This means that it has been growing its distributions at 5.5% per annum over that time. Bank of the James Financial Group has been growing its dividend at a decent rate, and the payments have been stable. However, the payment history is very short, so there is no evidence yet that the dividend can be sustained over a full economic cycle.

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. We are encouraged to see that Bank of the James Financial Group has grown earnings per share at 24% 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

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

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. For instance, we've picked out 2 warning signs for Bank of the James Financial Group that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.