HomeTrust Bancshares (NASDAQ:HTBI) Will Pay A Dividend Of $0.12

The board of HomeTrust Bancshares, Inc. (NASDAQ:HTBI) has announced that it will pay a dividend of $0.12 per share on the 27th of February. The dividend yield is 1.3% 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' Payment Expected To Have Solid Earnings Coverage

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

HomeTrust Bancshares has established itself as a dividend paying company, given its 6-year history of distributing earnings to shareholders. Using data from its latest earnings report, HomeTrust Bancshares' payout ratio sits at 22%, an extremely comfortable number that shows that it can pay its dividend.

EPS is set to fall by 7.8% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 17% over the same time period, which is in a pretty comfortable range.

HomeTrust Bancshares Is Still Building Its Track Record

It is great to see that HomeTrust Bancshares has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The dividend has gone from an annual total of $0.24 in 2019 to the most recent total annual payment of $0.48. This implies that the company grew its distributions at a yearly rate of about 12% over that duration. 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 could be attracted to the stock based on the quality of its payment history. HomeTrust Bancshares has seen EPS rising for the last five years, at 13% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

HomeTrust Bancshares Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think HomeTrust Bancshares might even raise payments in the future. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for HomeTrust Bancshares that investors should know about before committing capital to this stock. 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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