Veritex Holdings (NASDAQ:VBTX) Has Affirmed Its Dividend Of $0.20

The board of Veritex Holdings, Inc. (NASDAQ:VBTX) has announced that it will pay a dividend on the 23rd of August, with investors receiving $0.20 per share. This means the dividend yield will be fairly typical at 3.2%.

Check out our latest analysis for Veritex Holdings

Veritex Holdings' Earnings Will Easily Cover The Distributions

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Veritex Holdings has established itself as a dividend paying company, given its 6-year history of distributing earnings to shareholders. Based on Veritex Holdings' last earnings report, the payout ratio is at a decent 50%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next year, EPS is forecast to expand by 22.5%. If the dividend continues along recent trends, we estimate the future payout ratio will be 47%, which is in the range that makes us comfortable with the sustainability of the dividend.

Veritex Holdings Doesn't Have A Long Payment History

The dividend's track record has been pretty solid, but with only 6 years of history we want to see a few more years of history before making any solid conclusions. Since 2018, the dividend has gone from $0.50 total annually to $0.80. This means that it has been growing its distributions at 8.1% per annum over that time. Veritex Holdings has a nice track record of dividend growth but we would wait until we see a longer track record before getting too confident.

Veritex Holdings May Find It Hard To Grow The Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Earnings per share has been crawling upwards at 3.5% per year. Veritex Holdings is struggling to find viable investments, so it is returning more to shareholders. This isn't bad in itself, but unless earnings growth pick up we wouldn't expect dividends to grow either.

Our Thoughts On Veritex Holdings' Dividend

Overall, we think Veritex Holdings is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 2 warning signs for Veritex Holdings that investors should know about before committing capital to this stock. Is Veritex Holdings 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.

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