Home Bancshares (Conway AR) (NYSE:HOMB) Has Affirmed Its Dividend Of $0.18

The board of 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.

View our latest analysis for Home Bancshares (Conway AR)

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

Unless the payments are sustainable, the dividend yield doesn't mean too much.

Home Bancshares (Conway AR) has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. 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.

Looking forward, earnings per share is forecast to rise by 11.1% over the next year. Assuming the dividend continues along recent trends, we think the future payout ratio could be 38% by next year, which is in a pretty sustainable range.

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Home Bancshares (Conway AR) Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.15, compared to the most recent full-year payment of $0.72. This implies that the company grew its distributions at a yearly rate of about 17% over that duration. 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's Growth Prospects Are Limited

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings has been rising at 2.4% per annum over the last five years, which admittedly is a bit slow. Earnings growth is slow, but on the plus side, the dividend payout ratio is low and dividends could grow faster than earnings, if the company decides to increase its payout ratio.

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

Overall, we like to see the dividend staying consistent, and we think Home Bancshares (Conway AR) might even raise payments in the future. 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 of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Home Bancshares (Conway AR) that you should be aware of before investing. 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.