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

Byline Bancorp, Inc. (NYSE:BY) will pay a dividend of $0.09 on the 23rd of May. Including this payment, the dividend yield on the stock will be 1.9%, which is a modest boost for shareholders' returns.

View our latest analysis for Byline Bancorp

Byline Bancorp's Payment Expected To Have Solid Earnings Coverage

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, earnings per share is forecast to rise by 0.6% over the next year. If the dividend continues on this path, the future payout ratio could be 23% by next year, which we think can be pretty sustainable going forward.

Byline Bancorp Is Still Building Its Track Record

The company has maintained a consistent dividend for a few years now, but we would like to see a longer track record before relying on it. Since 2020, the annual payment back then was $0.12, compared to the most recent full-year payment of $0.36. This means that it has been growing its distributions at 44% per annum 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

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that Byline Bancorp has grown earnings per share at 45% 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.

We Really Like Byline Bancorp's Dividend

Overall, we like to see the dividend staying consistent, and we think Byline Bancorp might even raise payments in the future. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for Byline Bancorp that you should be aware of before investing. 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.