Byline Bancorp (NYSE:BY) Has Announced A Dividend Of $0.09

The board of Byline Bancorp, Inc. (NYSE:BY) has announced that it will pay a dividend of $0.09 per share on the 23rd of August. This means the annual payment will be 1.5% of the current stock price, which is lower than the industry average.

See our latest analysis for Byline Bancorp

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

Even a low dividend yield can be attractive if it is sustained for years on end.

Byline Bancorp has a short history of paying out dividends, with its current track record at only 3 years. Based on its last earnings report however, the payout ratio is at a comfortable 16%, meaning that Byline Bancorp may be able to sustain this dividend for future years if it continues on this earnings trend.

Over the next year, EPS is forecast to expand by 0.3%. If the dividend continues along recent trends, we estimate the future payout ratio will be 16%, which is in the range that makes us comfortable with the sustainability of the dividend.

Byline Bancorp Is Still Building Its Track Record

The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 3 years, which isn't that long in the grand scheme of things. The annual payment during the last 3 years was $0.12 in 2019, and the most recent fiscal year payment was $0.36. This implies that the company grew its distributions at a yearly rate of about 44% 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.

Dividend Growth May Be Hard To Come By

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, initial appearances might be deceiving. Over the past five years, it looks as though Byline Bancorp's EPS has declined at around 5.0% a year. If earnings continue declining, the company may have to make the difficult choice of reducing the dividend or even stopping it completely - the opposite of dividend growth. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.

Our Thoughts On Byline Bancorp's Dividend

In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Byline Bancorp's payments, as there could be some issues with sustaining them into the future. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. This company is not in the top tier of income providing stocks.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Byline Bancorp that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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