News
Bankwell Financial Group (NASDAQ:BWFG) Announced a $0.20 Dividend
Bankwell Financial Group, Inc. (NASDAQ:BWFG) will pay a dividend of $0.20 on August 23rd. This means the dividend yield will be quite typical at 2.9%.
Check out our latest analysis for Bankwell Financial Group
Bankwell Financial Group’s profits will easily cover distributions
We’re not very impressed with dividend yields unless they can be sustained over time.
Bankwell Financial Group has a good track record of paying dividends, with its current track record spanning 9 years. Taking data from its latest earnings report, calculating the company’s payout ratio of 27% shows that Bankwell Financial Group would be able to pay its latest dividend without putting pressure on its balance sheet.
Next year should see EPS growth of 18.5%. If the dividend continues as per recent trends, we estimate the future payout ratio to be 27%, which is in the range that makes us comfortable with the sustainability of the dividend.
historical dividend
Bankwell Financial Group is still building its track record
It’s great to see that Bankwell Financial Group has been paying a stable dividend for several years now, however, we want to be a little cautious about whether this will remain true over a full economic cycle. The dividend has gone from an annual total of $0.20 in 2015 to the most recent annual total payout of $0.80. This means that it has been increasing its distributions by 17% per year over that time. Bankwell Financial Group has been increasing its dividend very rapidly, which is exciting. However, the short payment history makes us wonder whether this performance will persist over a full market cycle.
Bankwell Financial Group may struggle to increase dividends
Investors may be drawn to the stock based on the quality of its payment history. Earnings per share have been rising slowly at 4.3% per year. Earnings growth is slow, but on the positive side, the dividend payout ratio is low and dividends could grow faster than earnings if the company decides to increase its payout ratio.
In short
Overall, we think Bankwell Financial Group is a solid pick as a dividend stock, even though the dividend hasn’t been raised this year. The dividend has been at reasonable levels historically, but that hasn’t translated into a consistent payout. It looks like it could be a good dividend stock going forward, but we’d like to note that the payout ratio has been at higher levels in the past, so that could happen again.
Market movements attest to how highly valued a consistent dividend policy is compared to one that is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should be aware of when evaluating a company. For example, we chose 2 Warning Signs for Bankwell Financial Group What investors should know before committing capital to this stock. If you are a dividend investor, you may also want to look at our selected list of high yield dividend stocks.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your objectives or financial situation. Our aim is to bring you long-term focused analysis, driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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