Richmond Mutual Bancorporation (NASDAQ:RMBI) Is Paying Out A Larger Dividend Than Last Year

The board of Richmond Mutual Bancorporation, Inc. (NASDAQ:RMBI) has announced that the dividend on 12th of March will be increased to $0.15, which will be 7.1% higher than last year's payment of $0.14 which covered the same period. This will take the annual payment to 4.2% of the stock price, which is above what most companies in the industry pay.

View our latest analysis for Richmond Mutual Bancorporation

Richmond Mutual Bancorporation's Payment Expected To Have Solid Earnings Coverage

A big dividend yield for a few years doesn't mean much if it can't be sustained.

Richmond Mutual Bancorporation has a good history of paying out dividends, with its current track record at 5 years. Taking data from its last earnings report, calculating for the company's payout ratio of 60%shows that Richmond Mutual Bancorporation would be able to pay its last dividend without pressure on the balance sheet.

If the trend of the last few years continues, EPS will grow by 35.7% over the next 12 months. Assuming the dividend continues along recent trends, we think the future payout ratio could be 59% by next year, which is in a pretty sustainable range.

Richmond Mutual Bancorporation Is Still Building Its Track Record

The dividend's track record has been pretty solid, but with only 5 years of history we want to see a few more years of history before making any solid conclusions. Since 2020, the dividend has gone from $0.20 total annually to $0.56. This means that it has been growing its distributions at 23% per annum over that time. 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

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Richmond Mutual Bancorporation has seen EPS rising for the last five years, at 36% per annum. Richmond Mutual Bancorporation is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.

Richmond Mutual Bancorporation Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Richmond Mutual Bancorporation is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Richmond Mutual Bancorporation stock. 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.