First Busey (NASDAQ:BUSE) Will Pay A Larger Dividend Than Last Year At $0.24

First Busey Corporation's (NASDAQ:BUSE) dividend will be increasing from last year's payment of the same period to $0.24 on 28th of April. This makes the dividend yield 5.0%, which is above the industry average.

Check out our latest analysis for First Busey

First Busey's Payment Expected To Have Solid Earnings Coverage

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, First Busey has a long history of paying out a part of its earnings to shareholders. Based on First Busey's last earnings report, the payout ratio is at a decent 40%, meaning that the company is able to pay out its dividend with a bit of room to spare.

The next 3 years are set to see EPS grow by 9.4%. Analysts forecast the future payout ratio could be 40% over the same time horizon, which is a number we think the company can maintain.

First Busey Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the dividend has gone from $0.48 total annually to $0.96. This means that it has been growing its distributions at 7.2% per annum over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

The Dividend Has Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. First Busey has seen EPS rising for the last five years, at 9.6% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for First Busey's prospects of growing its dividend payments in the future.

First Busey Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that First Busey is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for First Busey that investors should know about before committing capital to this stock. Is First Busey 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.