Assessing the Sustainability and Growth of Home BancShares Inc's Dividends
Home BancShares Inc (HOMB, Financial) recently announced a dividend of $0.18 per share, payable on 2024-03-06, with the ex-dividend date set for 2024-02-13. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Home BancShares Inc's dividend performance and assess its sustainability.
What Does Home BancShares Inc Do?
Home BancShares Inc is a bank holding company that primarily operates through its wholly owned community bank subsidiary, Centennial Bank. The bank provides a broad range of commercial and retail banking, as well as related financial services, to a diverse customer base. Its customer base includes businesses, real estate developers and investors, individuals, and municipalities. The company's loan portfolio, while diversified, is typically between half and two thirds in commercial real estate loans. The company's strategy emphasizes growth, both through strategic acquisitions and organically within its existing markets. The bank also emphasizes attracting experienced bankers, strong credit quality, and a solid balance sheet. The bank's main source of net revenue is net interest income.
A Glimpse at Home BancShares Inc's Dividend History
Home BancShares Inc has maintained a consistent dividend payment record since 2006, currently distributed on a quarterly basis. The company has increased its dividend each year since 2010, earning it the status of a dividend achiever. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Home BancShares Inc's Dividend Yield and Growth
As of today, Home BancShares Inc currently has a 12-month trailing dividend yield of 3.04% and a 12-month forward dividend yield of 3.04%, suggesting an expectation of consistent dividend payments over the next 12 months.
Over the past three years, Home BancShares Inc's annual dividend growth rate was 9.00%, which increased to 9.40% per year over a five-year horizon. Over the past decade, Home BancShares Inc's annual dividends per share growth rate stands at an impressive 18.90%. Based on Home BancShares Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Home BancShares Inc stock as of today is approximately 4.76%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of 2023-12-31, Home BancShares Inc's dividend payout ratio is 0.36, indicating a healthy balance between distributing profits to shareholders and retaining earnings for growth.
Home BancShares Inc's profitability rank of 6 out of 10 as of 2023-12-31, suggests fair profitability, with a consistent record of positive net income for each year over the past decade.
Growth Metrics: The Future Outlook
Robust growth metrics are essential for the sustainability of dividends. Home BancShares Inc's growth rank of 6 out of 10 suggests a fair growth outlook. The company's revenue and earnings growth rates outperform a significant percentage of global competitors, indicating a strong revenue model and an ability to increase earnings, which are critical for sustaining dividends in the long run.
Next Steps
In conclusion, Home BancShares Inc's consistent dividend payments, impressive growth rate, prudent payout ratio, and solid profitability metrics paint a promising picture for current and potential investors. With a forward-looking approach and a stable financial base, the company appears to be well-positioned to continue rewarding shareholders with dividends. Investors seeking to diversify their portfolio with high-dividend yield stocks may find Home BancShares Inc an attractive option. For further research, GuruFocus Premium users can utilize the High Dividend Yield Screener to discover more high-yield investment opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
