Yahoo Finance Burke & Herbert Financial Services (NASDAQ:BHRB) Has Affirmed Its Dividend Of $0.53
Burke & Herbert Financial Services Corp. (NASDAQ:BHRB) has announced that it will pay a dividend of $0.53 per share on the 3rd of June. This makes the dividend yield 3.9%, which will augment investor returns quite nicely.
See our latest analysis for Burke & Herbert Financial Services
Burke & Herbert Financial Services' Earnings Will Easily Cover The Distributions
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
Having distributed dividends for at least 10 years, Burke & Herbert Financial Services has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 77%, which means that Burke & Herbert Financial Services would be able to pay its last dividend without pressure on the balance sheet.
EPS is set to fall by 9.7% over the next 12 months if recent trends continue. However, if the dividend continues along recent trends, we estimate the future payout ratio could reach 88%, meaning that most of the company's earnings is being paid out to shareholders.
Burke & Herbert Financial Services Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the dividend has gone from $1.85 total annually to $2.12. This implies that the company grew its distributions at a yearly rate of about 1.4% over that duration. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.
Dividend Growth May Be Hard To Come By
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, initial appearances might be deceiving. It's not great to see that Burke & Herbert Financial Services' earnings per share has fallen at approximately 9.7% per year over the past five years. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends.
In Summary
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. Although they have been consistent in the past, we think the payments are a little high to be sustained. We don't think Burke & Herbert Financial Services is a great stock to add to your portfolio if income is your focus.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. 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 Burke & Herbert Financial Services that you should be aware of before investing. Is Burke & Herbert Financial Services not quite the opportunity you were looking for? Why not check out our selection of top 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.
