Yahoo Finance BayFirst Financial (NASDAQ:BAFN) Has Announced A Dividend Of $0.08
The board of BayFirst Financial Corp. (NASDAQ:BAFN) has announced that it will pay a dividend of $0.08 per share on the 15th of June. This payment means the dividend yield will be 2.2%, which is below the average for the industry.
Check out our latest analysis for BayFirst Financial
BayFirst Financial's Earnings Will Easily Cover The Distributions
While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.
BayFirst Financial is just starting to establish itself as being able to pay dividends to shareholders, given its short 2-year history of distributing earnings. Despite the company's shorter dividend history however, calculating for its payout ratio of 17% shows that BayFirst Financial is able to comfortably pay dividends.
Over the next year, EPS could expand by 1.6% if recent trends continue. If the dividend continues along recent trends, we estimate the future payout ratio will be 26%, which is in the range that makes us comfortable with the sustainability of the dividend.
BayFirst Financial Is Still Building Its Track Record
The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. Since 2021, the annual payment back then was $0.179, compared to the most recent full-year payment of $0.32. This means that it has been growing its distributions at 34% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
The Dividend's Growth Prospects Are Limited
Investors could be attracted to the stock based on the quality of its payment history. However, BayFirst Financial's EPS was effectively flat over the past five years, which could stop the company from paying more every year. While growth may be thin on the ground, BayFirst Financial could always pay out a higher proportion of earnings to increase shareholder returns.
In Summary
Overall, a consistent dividend is a good thing, and we think that BayFirst Financial has the ability to continue this into the future. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 3 warning signs for BayFirst Financial that you should be aware of before investing. Is BayFirst Financial 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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