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

The board of HomeTrust Bancshares, Inc. (NASDAQ:HTBI) has announced that it will pay a dividend of US$0.09 per share on the 2nd of June. This means the annual payment will be 1.3% of the current stock price, which is lower than the industry average.

See our latest analysis for HomeTrust Bancshares

HomeTrust Bancshares' Dividend Is Well Covered By Earnings

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. Before making this announcement, HomeTrust Bancshares was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 58.3%. If the dividend continues along recent trends, we estimate the payout ratio will be 20%, which is in the range that makes us comfortable with the sustainability of the dividend.

HomeTrust Bancshares Doesn't Have A Long Payment History

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 2018, the first annual payment was US$0.24, compared to the most recent full-year payment of US$0.36. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year 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.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see HomeTrust Bancshares has been growing its earnings per share at 19% a 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.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 2 warning signs for HomeTrust Bancshares you should be aware of, and 1 of them is a bit unpleasant. Is HomeTrust Bancshares not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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