Byline Bancorp (NYSE:BY) Will Pay A Dividend Of $0.09

Byline Bancorp, Inc.'s (NYSE:BY) investors are due to receive a payment of $0.09 per share on 21st of February. The dividend yield is 1.5% based on this payment, which is a little bit low compared to the other companies in the industry.

Check out our latest analysis for Byline Bancorp

Byline Bancorp's Earnings Will Easily Cover The Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Byline Bancorp has a short history of paying out dividends, with its current track record at only 3 years. Despite the company's shorter dividend history however, calculating for its payout ratio of 15% shows that Byline Bancorp is able to comfortably pay dividends.

Looking forward, EPS is forecast to rise by 12.9% over the next 3 years. Analysts forecast the future payout ratio could be 18% over the same time horizon, which is a number we think the company can maintain.

Byline Bancorp Is Still Building Its Track Record

Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. The annual payment during the last 3 years was $0.12 in 2020, and the most recent fiscal year payment was $0.36. This works out to be a compound annual growth rate (CAGR) of approximately 44% a year over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.

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 Byline Bancorp has grown earnings per share at 43% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.

Byline Bancorp Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. However, there are other things to consider for investors when analysing stock performance. Earnings growth generally bodes well for the future value of company dividend payments. See if the 5 Byline Bancorp analysts we track are forecasting continued growth with our free report on analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.