Yahoo Finance Bankwell Financial Group (NASDAQ:BWFG) Has Affirmed Its Dividend Of $0.20
Bankwell Financial Group, Inc. (NASDAQ:BWFG) will pay a dividend of $0.20 on the 21st of May. This means that the annual payment will be 3.4% of the current stock price, which is in line with the average for the industry.
See our latest analysis for Bankwell Financial Group
Bankwell Financial Group's Payment Expected To Have Solid Earnings Coverage
While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.
Bankwell Financial Group has a good history of paying out dividends, with its current track record at 8 years. Using data from its latest earnings report, Bankwell Financial Group's payout ratio sits at 21%, an extremely comfortable number that shows that it can pay its dividend.
Over the next year, EPS is forecast to fall by 1.1%. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 25%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
Bankwell Financial Group Doesn't Have A Long Payment History
Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. The annual payment during the last 8 years was $0.20 in 2016, and the most recent fiscal year payment was $0.80. This implies that the company grew its distributions at a yearly rate of about 19% 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.
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. Bankwell Financial Group has seen EPS rising for the last five years, at 11% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
Bankwell Financial Group Looks Like A Great Dividend Stock
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. 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. Just as an example, we've come across 2 warning signs for Bankwell Financial Group you should be aware of, and 1 of them is a bit unpleasant. 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.
