Have you been waiting for Home Bancshares Inc (Conway AR)’s (NASDAQ:HOMB) upcoming dividend of $0.11 per share? Then you only have to wait 3 more days before the stock pays out on 06 December 2017, and starts trading ex-dividend on the 14 November 2017. What does this mean for current shareholders and potential investors? Below, I will explain how holding HOMB can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. Check out our latest analysis for Home Bancshares (Conway AR)
5 questions to ask before buying a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is its annual yield among the top 25% of dividend-paying companies? Has it paid dividend every year without dramatically reducing payout in the past? Has the amount of dividend per share grown over the past? Is its earnings sufficient to payout dividend at the current rate? Will the company be able to keep paying dividend based on the future earnings growth?
NasdaqGS:HOMB Historical Dividend Yield Nov 11th 17
The current payout ratio for the stock is 33.76%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 29.43% and dividends yield to be around 2.08%. Moreover, EPS should increase to $1.41. This means the company should be able to continue to payout dividends. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. HOMB has increased its DPS from $0.04 to $0.44 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. In terms of its peers, HOMB generates a yield of 2.05%, which is on the low-side for banks stocks.
Are you a shareholder? If HOMB is in your portfolio for cash-generating reasons, there may be better alternatives out there, preferably ones with a more robust and increasing payout over time. It may be valuable exploring other income stocks as alternatives to HOMB or even look at high-growth stocks to supplement your steady income stocks. I suggest continuing your research by checking out my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? There isn’t much to like about Home Bancshares (Conway AR) from a dividend stock perspective. But if you are not exclusively a dividend investor, HOMB could still be an interesting investment opportunity. As with all investments, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Take a look at our latest free fundmental analysis to explore other aspects of HOMB.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.