First Busey (NASDAQ:BUSE) Is Due To Pay A Dividend Of $0.24

The board of First Busey Corporation (NASDAQ:BUSE) has announced that it will pay a dividend of $0.24 per share on the 28th of July. This means the annual payment is 4.5% of the current stock price, which is above the average for the industry.

View our latest analysis for First Busey

First Busey's Dividend Forecasted To Be Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much.

First Busey has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but First Busey's payout ratio of 38% is a good sign as this means that earnings decently cover dividends.

Looking forward, earnings per share is forecast to fall by 6.9% over the next year. But if the dividend continues along recent trends, we estimate the future payout ratio could be 44%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business in the future.

First Busey 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 2013, the dividend has gone from $0.48 total annually to $0.96. This implies that the company grew its distributions at a yearly rate of about 7.2% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. First Busey has seen EPS rising for the last five years, at 10% per annum. First Busey definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like First Busey'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 earnings easily cover the company's distributions, and the company is generating plenty of cash. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for First Busey that you should be aware of before investing. 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.