Here's What We Like About Home Bancshares (Conway AR)'s (NASDAQ:HOMB) Upcoming Dividend

It looks like Home Bancshares, Inc. (Conway, AR) (NASDAQ:HOMB) is about to go ex-dividend in the next 4 days. If you purchase the stock on or after the 16th of February, you won't be eligible to receive this dividend, when it is paid on the 10th of March.

Home Bancshares (Conway AR)'s upcoming dividend is US$0.14 a share, following on from the last 12 months, when the company distributed a total of US$0.56 per share to shareholders. Based on the last year's worth of payments, Home Bancshares (Conway AR) has a trailing yield of 2.4% on the current stock price of $23.345. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for Home Bancshares (Conway AR)

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Home Bancshares (Conway AR) paid out a comfortable 41% of its profit last year.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're encouraged by the steady growth at Home Bancshares (Conway AR), with earnings per share up 5.1% on average over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Home Bancshares (Conway AR) has delivered an average of 26% per year annual increase in its dividend, based on the past 10 years of dividend payments. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

Final Takeaway

Has Home Bancshares (Conway AR) got what it takes to maintain its dividend payments? Home Bancshares (Conway AR) has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. Overall, Home Bancshares (Conway AR) looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

While it's tempting to invest in Home Bancshares (Conway AR) for the dividends alone, you should always be mindful of the risks involved. Our analysis shows 2 warning signs for Home Bancshares (Conway AR) and you should be aware of them before buying any shares.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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