Investar Holding (NASDAQ:ISTR) Is Due To Pay A Dividend Of $0.105

The board of Investar Holding Corporation (NASDAQ:ISTR) has announced that it will pay a dividend of $0.105 per share on the 30th of April. The dividend yield is 2.4% based on this payment, which is a little bit low compared to the other companies in the industry.

Investar Holding's Payment Expected To Have Solid Earnings Coverage

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.

Investar Holding has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past data isn't a guarantee for the future, Investar Holding's latest earnings report puts its payout ratio at 20%, showing that the company can pay out its dividends comfortably.

Over the next 3 years, EPS is forecast to expand by 13.8%. The future payout ratio could be 20% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

View our latest analysis for Investar Holding

Investar Holding Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.0272 in 2015, and the most recent fiscal year payment was $0.42. This works out to be a compound annual growth rate (CAGR) of approximately 31% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

The Dividend's Growth Prospects Are Limited

Investors could be attracted to the stock based on the quality of its payment history. Earnings has been rising at 4.2% per annum over the last five years, which admittedly is a bit slow. While growth may be thin on the ground, Investar Holding could always pay out a higher proportion of earnings to increase shareholder returns.

Investar Holding Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

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. Earnings growth generally bodes well for the future value of company dividend payments. See if the 3 Investar Holding analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.