Yahoo Finance Eagle Bancorp (NASDAQ:EGBN) Is Due To Pay A Dividend Of $0.45
Eagle Bancorp, Inc. (NASDAQ:EGBN) has announced that it will pay a dividend of $0.45 per share on the 31st of July. This means the annual payment is 9.5% of the current stock price, which is above the average for the industry.
See our latest analysis for Eagle Bancorp
Eagle Bancorp's Earnings Will Easily Cover The Distributions
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Having paid out dividends for 5 years, Eagle Bancorp has a good history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Eagle Bancorp's payout ratio of 71% is a good sign for current shareholders as this means that earnings decently cover dividends.
Looking forward, EPS is forecast to rise by 6.6% over the next 3 years. The future payout ratio could be 35% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Eagle Bancorp Doesn't Have A Long Payment History
Eagle Bancorp's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2019, the annual payment back then was $0.88, compared to the most recent full-year payment of $1.80. This means that it has been growing its distributions at 15% per annum over that time. Eagle Bancorp has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
Dividend Growth Potential Is Shaky
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, things aren't all that rosy. Eagle Bancorp's EPS has fallen by approximately 10% per year during the past five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.
Our Thoughts On Eagle Bancorp's Dividend
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Eagle Bancorp has been making. We would be a touch cautious of relying on this stock primarily for the dividend income.
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 Eagle Bancorp that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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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