William Penn Bancorporation (NASDAQ:WMPN) Is Due To Pay A Dividend Of $0.03

William Penn Bancorporation (NASDAQ:WMPN) will pay a dividend of $0.03 on the 10th of August. Including this payment, the dividend yield on the stock will be 1.1%, which is a modest boost for shareholders' returns.

See our latest analysis for William Penn Bancorporation

William Penn Bancorporation's Earnings Will Easily Cover The Distributions

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.

William Penn Bancorporation has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on William Penn Bancorporation's last earnings report, the payout ratio is at a decent 54%, meaning that the company is able to pay out its dividend with a bit of room to spare.

If the trend of the last few years continues, EPS will grow by 11.6% over the next 12 months. If the dividend continues on this path, the future payout ratio could be 45% by next year, which we think can be pretty sustainable going forward.

William Penn Bancorporation Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the annual payment back then was $0.0614, compared to the most recent full-year payment of $0.12. This implies that the company grew its distributions at a yearly rate of about 6.9% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that William Penn Bancorporation has grown earnings per share at 12% 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.

William Penn Bancorporation Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think William Penn Bancorporation might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for William Penn Bancorporation that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield 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.