First Busey's (NASDAQ:BUSE) Dividend Will Be $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 25th of October. Based on this payment, the dividend yield will be 3.8%, which is fairly typical for the industry.

See our latest analysis for First Busey

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

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Having distributed dividends for at least 10 years, First Busey has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but First Busey's payout ratio of 49% is a good sign as this means that earnings decently cover dividends.

Looking forward, EPS is forecast to rise by 47.0% over the next 3 years. Analysts estimate the future payout ratio will be 36% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

First Busey Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was $0.48, compared to the most recent full-year payment of $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's Growth Prospects Are Limited

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Let's not jump to conclusions as things might not be as good as they appear on the surface. However, First Busey's EPS was effectively flat over the past five years, which could stop the company from paying more every year.

Our Thoughts On First Busey's Dividend

Overall, a consistent dividend is a good thing, and we think that First Busey has the ability to continue this into the future. The earnings coverage is acceptable for now, but with earnings on the decline we would definitely keep an eye on the payout ratio. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. 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 First Busey that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield 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.