Barrett Business Services (NASDAQ:BBSI) Will Pay A Dividend Of $0.30

The board of Barrett Business Services, Inc. (NASDAQ:BBSI) has announced that it will pay a dividend of $0.30 per share on the 2nd of June. This payment means that the dividend yield will be 1.5%, which is around the industry average.

View our latest analysis for Barrett Business Services

Barrett Business Services' Dividend Is Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. Before making this announcement, Barrett Business Services was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share is forecast to rise by 10.0% over the next year. Assuming the dividend continues along recent trends, we think the payout ratio could be 16% by next year, which is in a pretty sustainable range.

Barrett Business Services Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.44 in 2013, and the most recent fiscal year payment was $1.20. This means that it has been growing its distributions at 11% 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.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Barrett Business Services has impressed us by growing EPS at 13% per year over the past five years. Barrett Business Services definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Barrett Business Services' Dividend

Overall, we like to see the dividend staying consistent, and we think Barrett Business Services 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.

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 instance, we've picked out 1 warning sign for Barrett Business Services 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.