Bank7 (NASDAQ:BSVN) Is Paying Out A Dividend Of $0.12

The board of Bank7 Corp. (NASDAQ:BSVN) has announced that it will pay a dividend of $0.12 per share on the 7th of October. This means the annual payment will be 2.0% of the current stock price, which is lower than the industry average.

View our latest analysis for Bank7

Bank7's Payment Expected To Have Solid Earnings Coverage

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Bank7 is just starting to establish itself as being able to pay dividends to shareholders, given its short 3-year history of distributing earnings. Based on its last earnings report however, the payout ratio is at a comfortable 17%, meaning that Bank7 may be able to sustain this dividend for future years if it continues on this earnings trend.

The next year is set to see EPS grow by 13.7%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 9.4% by next year, which is in a pretty sustainable range.

Bank7 Is Still Building Its Track Record

The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 3 years, which isn't that long in the grand scheme of things. Since 2019, the annual payment back then was $0.40, compared to the most recent full-year payment of $0.48. This implies that the company grew its distributions at a yearly rate of about 6.3% over that duration. Bank7 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's Growth Prospects Are Limited

The company's investors will be pleased to have been receiving dividend income for some time. Earnings has been rising at 3.7% per annum over the last five years, which admittedly is a bit slow. While EPS growth is quite low, Bank7 has the option to increase the payout ratio to return more cash to shareholders.

Our Thoughts On Bank7's Dividend

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for Bank7 that investors should know about before committing capital to this stock. 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.