HomeTrust Bancshares (NYSE:HTB) Is Paying Out A Dividend Of $0.12

The board of HomeTrust Bancshares, Inc. (NYSE:HTB) has announced that it will pay a dividend of $0.12 per share on the 28th of August. Including this payment, the dividend yield on the stock will be 1.2%, which is a modest boost for shareholders' returns.

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HomeTrust Bancshares' Earnings Will Easily Cover The Distributions

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

Having paid out dividends for 7 years, HomeTrust Bancshares has a good history of paying out a part of its earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 14% also shows that HomeTrust Bancshares is able to comfortably pay dividends.

Over the next year, EPS is forecast to fall by 2.0%. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 17%, which we are pretty comfortable with and we think would be feasible on an earnings basis.

Check out our latest analysis for HomeTrust Bancshares

HomeTrust Bancshares Is Still Building Its Track Record

HomeTrust Bancshares' dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The dividend has gone from an annual total of $0.24 in 2018 to the most recent total annual payment of $0.48. This works out to be a compound annual growth rate (CAGR) of approximately 10% 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

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. HomeTrust Bancshares has impressed us by growing EPS at 20% 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 HomeTrust Bancshares' Dividend

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. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for HomeTrust Bancshares that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.