Home Bancorp (NASDAQ:HBCP) Has Announced A Dividend Of $0.25

The board of Home Bancorp, Inc. (NASDAQ:HBCP) has announced that it will pay a dividend on the 10th of May, with investors receiving $0.25 per share. This payment means that the dividend yield will be 2.8%, which is around the industry average.

Check out our latest analysis for Home Bancorp

Home Bancorp's Dividend Forecasted To Be Well Covered By Earnings

Unless the payments are sustainable, the dividend yield doesn't mean too much.

Home Bancorp has established itself as a dividend paying company, given its 9-year history of distributing earnings to shareholders. While past data isn't a guarantee for the future, Home Bancorp's latest earnings report puts its payout ratio at 21%, showing that the company can pay out its dividends comfortably.

Over the next year, EPS is forecast to fall by 4.9%. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 26%, which we are pretty comfortable with and we think would be feasible on an earnings basis.

Home Bancorp Doesn't Have A Long Payment History

The dividend's track record has been pretty solid, but with only 9 years of history we want to see a few more years of history before making any solid conclusions. Since 2015, the annual payment back then was $0.28, compared to the most recent full-year payment of $1.00. This means that it has been growing its distributions at 15% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

Home Bancorp Could Grow Its Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that Home Bancorp has been growing its earnings per share at 5.9% a year over the past five years. Home Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Our Thoughts On Home Bancorp'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 dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Case in point: We've spotted 2 warning signs for Home Bancorp (of which 1 is concerning!) you should know about. Is Home Bancorp 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.