Home Bancshares (Conway AR) (NYSE:HOMB) Is Paying Out A Dividend Of $0.18

Home Bancshares, Inc. (Conway, AR) (NYSE:HOMB) has announced that it will pay a dividend of $0.18 per share on the 5th of June. Based on this payment, the dividend yield will be 2.9%, which is fairly typical for the industry.

See our latest analysis for Home Bancshares (Conway AR)

Home Bancshares (Conway AR)'s Earnings Will Easily Cover The Distributions

We aren't too impressed by dividend yields unless they can be sustained over time.

Home Bancshares (Conway AR) has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Home Bancshares (Conway AR)'s payout ratio of 37% is a good sign as this means that earnings decently cover dividends.

The next year is set to see EPS grow by 11.1%. If the dividend continues on this path, the future payout ratio could be 38% by next year, which we think can be pretty sustainable going forward.

Home Bancshares (Conway AR) Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from $0.15 total annually to $0.72. This means that it has been growing its distributions at 17% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

Dividend Growth May Be Hard To Achieve

The company's investors will be pleased to have been receiving dividend income for some time. However, Home Bancshares (Conway AR) has only grown its earnings per share at 2.3% per annum over the past five years. While growth may be thin on the ground, Home Bancshares (Conway AR) could always pay out a higher proportion of earnings to increase shareholder returns.

Home Bancshares (Conway AR) Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. 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 in all, this checks a lot of the boxes we look for when choosing an income 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. For example, we've picked out 1 warning sign for Home Bancshares (Conway AR) 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.