Eagle Bancorp Montana (NASDAQ:EBMT) Is Due To Pay A Dividend Of $0.14

The board of Eagle Bancorp Montana, Inc. (NASDAQ:EBMT) has announced that it will pay a dividend on the 1st of December, with investors receiving $0.14 per share. This means the dividend yield will be fairly typical at 4.8%.

View our latest analysis for Eagle Bancorp Montana

Eagle Bancorp Montana's Earnings Will Easily Cover The Distributions

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Having distributed dividends for at least 10 years, Eagle Bancorp Montana has a long history of paying out a part of its earnings to shareholders. Based on Eagle Bancorp Montana's last earnings report, the payout ratio is at a decent 38%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, EPS is forecast to rise by 19.8% over the next 3 years. Analysts estimate the future payout ratio will be 34% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

Eagle Bancorp Montana Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $0.285 in 2013 to the most recent total annual payment of $0.56. This works out to be a compound annual growth rate (CAGR) of approximately 7.0% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Eagle Bancorp Montana has impressed us by growing EPS at 13% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Eagle Bancorp Montana's prospects of growing its dividend payments in the future.

Eagle Bancorp Montana 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. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. As an example, we've identified 2 warning signs for Eagle Bancorp Montana 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.