Bank of the James Financial Group's (NASDAQ:BOTJ) Dividend Will Be Increased To $0.08
Bank of the James Financial Group, Inc. (NASDAQ:BOTJ) has announced that it will be increasing its dividend from last year's comparable payment on the 9th of December to $0.08. This makes the dividend yield about the same as the industry average at 2.7%.
View our latest analysis for Bank of the James Financial Group
Bank of the James Financial Group's Dividend Forecasted To Be Well Covered By Earnings
Solid dividend yields are great, but they only really help us if the payment is sustainable.
Bank of the James 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, Bank of the James Financial Group's payout ratio sits at 15%, an extremely comfortable number that shows that it can pay its dividend.
If the trend of the last few years continues, EPS will grow by 26.0% over the next 12 months. If the dividend continues along recent trends, we estimate the future payout ratio will be 13%, which is in the range that makes us comfortable with the sustainability of the dividend.
Bank of the James Financial Group Doesn't Have A Long Payment History
It is great to see that Bank of the James Financial Group has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The dividend has gone from an annual total of $0.182 in 2014 to the most recent total annual payment of $0.32. This implies that the company grew its distributions at a yearly rate of about 7.3% over that duration. Bank of the James Financial Group has been growing its dividend at a decent rate, and the payments have been stable. However, the payment history is very short, so there is no evidence yet that the dividend can be sustained over a full economic cycle.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Bank of the James Financial Group has grown earnings per share at 26% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.
We Really Like Bank of the James Financial Group's Dividend
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
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. Taking the debate a bit further, we've identified 2 warning signs for Bank of the James Financial Group that investors need to be conscious of moving forward. Is Bank of the James Financial Group 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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