HomeTrust Bancshares (NASDAQ:HTBI) Is Paying Out A Larger Dividend Than Last Year

HomeTrust Bancshares, Inc.'s (NASDAQ:HTBI) dividend will be increasing from last year's payment of the same period to $0.11 on 30th of November. Despite this raise, the dividend yield of 2.1% is only a modest boost to shareholder returns.

View our latest analysis for HomeTrust Bancshares

HomeTrust Bancshares' Earnings Will Easily Cover The Distributions

If it is predictable over a long period, even low dividend yields can be attractive.

Having paid out dividends for 5 years, HomeTrust Bancshares has a good history of paying out a part of its earnings to shareholders. Using data from its latest earnings report, HomeTrust Bancshares' payout ratio sits at 13%, an extremely comfortable number that shows that it can pay its dividend.

Over the next 3 years, EPS is forecast to fall by 11.7%. However, as estimated by analysts, the future payout ratio could be 15% over the same time period, which we think the company can easily maintain.

HomeTrust Bancshares Is Still Building Its Track Record

HomeTrust Bancshares' dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The dividend has gone from an annual total of $0.24 in 2018 to the most recent total annual payment of $0.44. This implies that the company grew its distributions at a yearly rate of about 13% over that duration. 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

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 that HomeTrust Bancshares has been growing its earnings per share at 38% a year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

An additional note is that the company has been raising capital by issuing stock equal to 11% of shares outstanding in the last 12 months. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.

We Really Like HomeTrust Bancshares' Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Case in point: We've spotted 3 warning signs for HomeTrust Bancshares (of which 1 is potentially serious!) you should know about. 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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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.