Riverview Bancorp's (NASDAQ:RVSB) Dividend Will Be $0.06

The board of Riverview Bancorp, Inc. (NASDAQ:RVSB) has announced that it will pay a dividend on the 24th of October, with investors receiving $0.06 per share. This payment means that the dividend yield will be 3.7%, which is around the industry average.

View our latest analysis for Riverview Bancorp

Riverview Bancorp's Payment Expected To Have Solid Earnings Coverage

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Riverview Bancorp has established itself as a dividend paying company, given its 8-year history of distributing earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 24% also shows that Riverview Bancorp is able to comfortably pay dividends.

Looking forward, earnings per share is forecast to fall by 5.9% over the next year. But if the dividend continues along recent trends, we estimate the future payout ratio could be 32%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business in the future.

Riverview Bancorp Doesn't Have A Long Payment History

It is great to see that Riverview Bancorp has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The annual payment during the last 8 years was $0.045 in 2014, 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. Riverview Bancorp 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. We are encouraged to see that Riverview Bancorp has grown earnings per share at 19% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Riverview Bancorp 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. The earnings easily cover the company's distributions, and the company is generating plenty of cash. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. 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. For example, we've identified 3 warning signs for Riverview Bancorp (1 doesn't sit too well with us!) that you should be aware of before investing. 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.