Yahoo Finance West Bancorporation (NASDAQ:WTBA) Has Affirmed Its Dividend Of $0.25
The board of West Bancorporation, Inc. (NASDAQ:WTBA) has announced that it will pay a dividend of $0.25 per share on the 22nd of February. This means the annual payment is 4.8% of the current stock price, which is above the average for the industry.
Check out our latest analysis for West Bancorporation
West Bancorporation's Dividend Forecasted To Be Well Covered By Earnings
A big dividend yield for a few years doesn't mean much if it can't be sustained.
West Bancorporation has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on West Bancorporation's last earnings report, the payout ratio is at a decent 36%, meaning that the company is able to pay out its dividend with a bit of room to spare.
EPS is set to fall by 57.4% over the next 3 years. Fortunately, analysts forecast the future payout ratio to be 57% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.
West Bancorporation Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2013, the dividend has gone from $0.32 total annually to $1.00. This implies that the company grew its distributions at a yearly rate of about 12% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. West Bancorporation has seen EPS rising for the last five years, at 14% per annum. West Bancorporation definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Our Thoughts On West Bancorporation's Dividend
Overall, a consistent dividend is a good thing, and we think that West Bancorporation has the ability to continue this into the future. Strong earnings growth is a great sign, especially since the company is paying out such a high proportion of earnings currently. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for West Bancorporation that investors should take into consideration. Is West Bancorporation 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.
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