Home Bancorp's (NASDAQ:HBCP) Dividend Will Be Increased To $0.27

The board of Home Bancorp, Inc. (NASDAQ:HBCP) has announced that it will be paying its dividend of $0.27 on the 21st of February, an increased payment from last year's comparable dividend. Despite this raise, the dividend yield of 2.2% is only a modest boost to shareholder returns.

View our latest analysis for Home Bancorp

Home Bancorp's Earnings Will Easily Cover The Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Home Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past records don't necessarily translate into future results, the company's payout ratio of 22% also shows that Home Bancorp is able to comfortably pay dividends.

Looking forward, EPS is forecast to rise by 17.9% over the next 3 years. Analysts forecast the future payout ratio could be 21% over the same time horizon, which is a number we think the company can maintain.

Home Bancorp 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 $0.28 in 2015 to the most recent total annual payment of $1.08. This implies that the company grew its distributions at a yearly rate of about 14% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

Home Bancorp Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Home Bancorp has been growing its earnings per share at 6.7% 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.

Home Bancorp Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Home Bancorp is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 3 analysts we track are forecasting for Home Bancorp for free with public analyst estimates for the company. 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.