Timberland Bancorp (NASDAQ:TSBK) Has Affirmed Its Dividend Of $0.24

Timberland Bancorp, Inc. (NASDAQ:TSBK) has announced that it will pay a dividend of $0.24 per share on the 24th of May. Based on this payment, the dividend yield will be 3.8%, which is fairly typical for the industry.

View our latest analysis for Timberland Bancorp

Timberland Bancorp's Payment Expected To Have Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time.

Timberland Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 30%, which means that Timberland Bancorp would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, earnings per share could rise by 3.4% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the future payout ratio will be 34%, which is in the range that makes us comfortable with the sustainability of the dividend.

historic-dividend

Timberland Bancorp Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.12, compared to the most recent full-year payment of $0.96. This works out to be a compound annual growth rate (CAGR) of approximately 23% a year 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.

Dividend Growth May Be Hard To Achieve

Investors could be attracted to the stock based on the quality of its payment history. However, Timberland Bancorp has only grown its earnings per share at 3.4% per annum over the past five years. While growth may be thin on the ground, Timberland Bancorp could always pay out a higher proportion of earnings to increase shareholder returns.

Timberland Bancorp Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Timberland Bancorp 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.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Now, if you want to look closer, it would be worth checking out our free research on Timberland Bancorp management tenure, salary, and performance. Is Timberland Bancorp not quite the opportunity you were looking for? Why not check out our selection of top 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.