First Internet Bancorp (NASDAQ:INBK) Is Paying Out A Dividend Of $0.06

The board of First Internet Bancorp (NASDAQ:INBK) has announced that it will pay a dividend on the 15th of July, with investors receiving $0.06 per share. This payment means the dividend yield will be 1.0%, which is below the average for the industry.

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First Internet Bancorp's Dividend Forecasted To Be Well Covered By Earnings

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

First Internet Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. While past data isn't a guarantee for the future, First Internet Bancorp's latest earnings report puts its payout ratio at 9.9%, showing that the company can pay out its dividends comfortably.

The next year is set to see EPS grow by 45.3%. If the dividend continues along recent trends, we estimate the future payout ratio will be 6.8%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for First Internet Bancorp

First Internet Bancorp Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. There hasn't been much of a change in the dividend over the last 10 years. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

First Internet Bancorp May Find It Hard To Grow The Dividend

The company's investors will be pleased to have been receiving dividend income for some time. However, things aren't all that rosy. However, First Internet Bancorp's EPS was effectively flat over the past five years, which could stop the company from paying more every year.

In Summary

Overall, a consistent dividend is a good thing, and we think that First Internet Bancorp has the ability to continue this into the future. With shrinking earnings, the company may see some issues maintaining the dividend even though they look pretty sustainable for now. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Given that earnings are not growing, the dividend does not look nearly so attractive. See if the 4 analysts are forecasting a turnaround in our free collection of analyst estimates here. Is First Internet Bancorp not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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