HomeTrust Bancshares (NYSE:HTB) Has Affirmed Its Dividend Of $0.12

HomeTrust Bancshares, Inc. (NYSE:HTB) will pay a dividend of $0.12 on the 29th of May. This payment means the dividend yield will be 1.4%, which is below the average for the industry.

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HomeTrust Bancshares' Dividend Forecasted To Be Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive.

HomeTrust Bancshares has a good history of paying out dividends, with its current track record at 6 years. While past data isn't a guarantee for the future, HomeTrust Bancshares' latest earnings report puts its payout ratio at 14%, showing that the company can pay out its dividends comfortably.

Looking forward, earnings per share is forecast to fall by 1.5% over the next year. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 18%, which would be comfortable for the company to continue in the future.

See our latest analysis for HomeTrust Bancshares

HomeTrust Bancshares Is Still Building Its Track Record

It is great to see that HomeTrust Bancshares has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2019, the dividend has gone from $0.24 total annually to $0.48. This implies that the company grew its distributions at a yearly rate of about 12% over that duration. HomeTrust Bancshares has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

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. It's encouraging to see that HomeTrust Bancshares has been growing its earnings per share at 15% a year over the past five years. HomeTrust Bancshares definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like HomeTrust Bancshares' Dividend

Overall, we like to see the dividend staying consistent, and we think HomeTrust Bancshares might even raise payments in the future. The earnings easily cover the company's distributions, and the company is generating plenty of cash. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for HomeTrust Bancshares that investors should take into consideration. 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.