Northrim BanCorp's (NASDAQ:NRIM) Upcoming Dividend Will Be Larger Than Last Year's

Northrim BanCorp, Inc. +0.24%

Northrim BanCorp, Inc.

NRIM

54.91

+0.24%

The board of Northrim BanCorp, Inc. (NASDAQ:NRIM) has announced that the dividend on 15th of March will be increased to $0.61, which will be 1.7% higher than last year's payment of $0.60 which covered the same period. This takes the dividend yield to 4.4%, which shareholders will be pleased with.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Northrim BanCorp's stock price has increased by 31% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

See our latest analysis for Northrim BanCorp

Northrim BanCorp's Earnings Will Easily Cover The Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

Northrim BanCorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Northrim BanCorp's last earnings report, the payout ratio is at a decent 53%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, earnings per share could rise by 9.6% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the future payout ratio could be 54% by next year, which is in a pretty sustainable range.

historic-dividend
NasdaqGS:NRIM Historic Dividend January 30th 2024

Northrim BanCorp Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the dividend has gone from $0.60 total annually to $2.40. This means that it has been growing its distributions at 15% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

Northrim BanCorp Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Northrim BanCorp has seen EPS rising for the last five years, at 9.6% per annum. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

We Really Like Northrim BanCorp's Dividend

Overall, a dividend increase is always good, and we think that Northrim BanCorp is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Now, if you want to look closer, it would be worth checking out our free research on Northrim BanCorp management tenure, salary, and performance. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

Every question you ask will be answered
Scan the QR code to contact us
whatsapp
Also you can contact us via