Yahoo Finance Eagle Bancorp (NASDAQ:EGBN) Will Pay A Dividend Of $0.45
Eagle Bancorp, Inc.'s (NASDAQ:EGBN) investors are due to receive a payment of $0.45 per share on 30th of April. Based on this payment, the dividend yield on the company's stock will be 8.1%, which is an attractive boost to shareholder returns.
Check out our latest analysis for Eagle Bancorp
Eagle Bancorp's Payment Expected To Have Solid Earnings Coverage
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.
Eagle Bancorp has established itself as a dividend paying company, given its 5-year history of distributing earnings to shareholders. Based on Eagle Bancorp's last earnings report, the payout ratio is at a decent 54%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Looking forward, earnings per share is forecast to fall by 29.4% over the next 3 years. However, as estimated by analysts, the future payout ratio could be 68% over the same time period, which we think the company can easily maintain.
Eagle Bancorp Is Still Building Its Track Record
It is great to see that Eagle Bancorp has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2019, the annual payment back then was $0.88, compared to the most recent full-year payment of $1.80. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
Dividend Growth Is Doubtful
The company's investors will be pleased to have been receiving dividend income for some time. However, initial appearances might be deceiving. It's not great to see that Eagle Bancorp's earnings per share has fallen at approximately 5.4% per year over the past five years. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits.
The Dividend Could Prove To Be Unreliable
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Eagle Bancorp's payments, as there could be some issues with sustaining them into the future. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. We would probably look elsewhere for an income investment.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've identified 3 warning signs for Eagle Bancorp (1 can't be ignored!) that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield 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.
