Riverview Bancorp (NASDAQ:RVSB) Is Paying Out A Dividend Of $0.06

The board of Riverview Bancorp, Inc. (NASDAQ:RVSB) has announced that it will pay a dividend on the 24th of July, with investors receiving $0.06 per share. This makes the dividend yield 4.7%, which will augment investor returns quite nicely.

See our latest analysis for Riverview Bancorp

Riverview Bancorp's Dividend Forecasted To Be Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much.

Riverview Bancorp has established itself as a dividend paying company, given its 8-year history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio of 29%shows that Riverview Bancorp would be able to pay its last dividend without pressure on the balance sheet.

EPS is set to fall by 52.6% over the next 3 years. Fortunately, analysts forecast the future payout ratio to be 50% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.

Riverview Bancorp 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. The annual payment during the last 8 years was $0.045 in 2015, and the most recent fiscal year payment was $0.24. This implies that the company grew its distributions at a yearly rate of about 23% 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 who have held shares in the company for the past few years will be happy with the dividend income they have received. Riverview Bancorp has impressed us by growing EPS at 13% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Riverview Bancorp's prospects of growing its dividend payments in the future.

Riverview Bancorp Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Riverview Bancorp might even raise payments in the future. The earnings easily cover the company's distributions, and the company is generating plenty of cash. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. To that end, Riverview Bancorp has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about. Is Riverview Bancorp 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.