Yahoo Finance Heritage Commerce (NASDAQ:HTBK) Has Affirmed Its Dividend Of $0.13
Heritage Commerce Corp's (NASDAQ:HTBK) investors are due to receive a payment of $0.13 per share on 22nd of November. Based on this payment, the dividend yield will be 3.6%, which is fairly typical for the industry.
View our latest analysis for Heritage Commerce
Heritage Commerce's Payment Expected To Have Solid Earnings Coverage
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.
Heritage Commerce has a good history of paying out dividends, with its current track record at 9 years. Past distributions do not necessarily guarantee future ones, but Heritage Commerce's payout ratio of 53% is a good sign for current shareholders as this means that earnings decently cover dividends.
The next 3 years are set to see EPS grow by 48.1%. Analysts forecast the future payout ratio could be 37% over the same time horizon, which is a number we think the company can maintain.
Heritage Commerce Is Still Building Its Track Record
Heritage Commerce's 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. Since 2013, the annual payment back then was $0.12, compared to the most recent full-year payment of $0.52. This works out to be a compound annual growth rate (CAGR) of approximately 18% a year over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
Heritage Commerce May Find It Hard To Grow The Dividend
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Earnings has been rising at 4.7% per annum over the last five years, which admittedly is a bit slow. Heritage Commerce is struggling to find viable investments, so it is returning more to shareholders. While this isn't necessarily a negative, it definitely signals that dividend growth could be constrained in the future unless earnings start to pick up again.
In Summary
Overall, a consistent dividend is a good thing, and we think that Heritage Commerce has the ability to continue this into the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 2 warning signs for Heritage Commerce that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
