Richmond Mutual Bancorporation (NASDAQ:RMBI) Has Announced A Dividend Of $0.14

Richmond Mutual Bancorporation, Inc. (NASDAQ:RMBI) has announced that it will pay a dividend of $0.14 per share on the 19th of December. This means the annual payment is 3.9% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Richmond Mutual Bancorporation

Richmond Mutual Bancorporation's Dividend Forecasted To Be Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.

Richmond Mutual Bancorporation has established itself as a dividend paying company, given its 5-year history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Richmond Mutual Bancorporation's payout ratio of 64% is a good sign for current shareholders as this means that earnings decently cover dividends.

Looking forward, earnings per share could rise by 38.9% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the future payout ratio could be 61% by next year, which is in a pretty sustainable range.

Richmond Mutual Bancorporation Doesn't Have A Long Payment History

Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. Since 2019, the dividend has gone from $0.20 total annually to $0.56. This implies that the company grew its distributions at a yearly rate of about 23% over that duration. Richmond Mutual Bancorporation has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

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 Richmond Mutual Bancorporation has been growing its earnings per share at 39% a year over the past five years. The company doesn't have any problems growing, despite returning a lot of capital to shareholders, which is a very nice combination for a dividend stock to have.

Richmond Mutual Bancorporation Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Richmond Mutual Bancorporation might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. See if management have their own wealth at stake, by checking insider shareholdings in Richmond Mutual Bancorporation stock. Is Richmond Mutual Bancorporation 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.