HomeTrust Bancshares' (NASDAQ:HTBI) Dividend Will Be US$0.09

HomeTrust Bancshares, Inc. (NASDAQ:HTBI) will pay a dividend of US$0.09 on the 3rd of March. The dividend yield is 1.1% based on this payment, which is a little bit low compared to the other companies in the industry.

View our latest analysis for HomeTrust Bancshares

HomeTrust Bancshares' Earnings 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. However, prior to this announcement, HomeTrust Bancshares' dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 58.5% over the next year. If the dividend continues on this path, the payout ratio could be 16% by next year, which we think can be pretty sustainable going forward.

HomeTrust Bancshares Is Still Building Its Track Record

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2019, the dividend has gone from US$0.24 to US$0.36. This works out to be a compound annual growth rate (CAGR) of approximately 14% a year over that time. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that HomeTrust Bancshares has grown earnings per share at 12% per year over the past five years. HomeTrust Bancshares definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

HomeTrust Bancshares Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for HomeTrust Bancshares that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.

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