Westamerica Bancorporation (NASDAQ:WABC) Has Affirmed Its Dividend Of $0.42

The board of Westamerica Bancorporation (NASDAQ:WABC) has announced that it will pay a dividend on the 18th of November, with investors receiving $0.42 per share. Based on this payment, the dividend yield will be 2.7%, which is fairly typical for the industry.

Check out our latest analysis for Westamerica Bancorporation

Westamerica Bancorporation's Payment Expected To Have Solid Earnings Coverage

Solid dividend yields are great, but they only really help us if the payment is sustainable.

Having distributed dividends for at least 10 years, Westamerica Bancorporation has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 43%, which means that Westamerica Bancorporation would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, EPS is forecast to rise by 61.5% over the next 3 years. Analysts forecast the future payout ratio could be 31% over the same time horizon, which is a number we think the company can maintain.

Westamerica Bancorporation Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2012, the annual payment back then was $1.48, compared to the most recent full-year payment of $1.68. This means that it has been growing its distributions at 1.3% per annum over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

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 Westamerica Bancorporation has grown earnings per share at 11% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

Westamerica Bancorporation Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Westamerica Bancorporation might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Are management backing themselves to deliver performance? Check their shareholdings in Westamerica Bancorporation in our latest insider ownership analysis. Is Westamerica 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.