National Bank Holdings Corporation (NYSE:NBHC) will increase its dividend from last year’s comparable payment on the 13th of December to $0.29. This makes the dividend yield about the same as the industry average at 2.6%.
See our latest analysis for National Bank Holdings
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.
Having distributed dividends for at least 10 years, National Bank Holdings has a long history of paying out a part of its earnings to shareholders. Based on National Bank Holdings’ last earnings report, the payout ratio is at a decent 35%, meaning that the company is able to pay out its dividend with a bit of room to spare.
The next 3 years are set to see EPS grow by 16.2%. The future payout ratio could be 33% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Even over a long history of paying dividends, the company’s distributions have been remarkably stable. Since 2014, the annual payment back then was $0.20, compared to the most recent full-year payment of $1.16. This means that it has been growing its distributions at 19% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
Some investors will be chomping at the bit to buy some of the company’s stock based on its dividend history. It’s encouraging to see that National Bank Holdings has been growing its earnings per share at 5.3% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for National Bank Holdings’ prospects of growing its dividend payments in the future.
Overall, a dividend increase is always good, and we think that National Bank Holdings is a strong income stock thanks to its track record and growing earnings. 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.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we’ve identified 1 warning sign for National Bank Holdings 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.
