An in-depth look at the dividend performance and sustainability of RBB Bancorp (RBB, Financial)
RBB Bancorp (RBB) recently announced a dividend of $0.16 per share, payable on 2023-11-10, with the ex-dividend date set for 2023-10-27. 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 delve into RBB Bancorp's dividend performance and assess its sustainability.
What Does RBB Bancorp Do?
RBB Bancorp operates as a bank holding company. It provides various banking products and services such as checking, savings, money market accounts, and certificates of deposits. Its specific services include remote deposit, E-banking, mobile banking, commercial and investor real estate loans, business loans and lines of credit, Small Business Administration (SBA) 7A and 504 loans, mortgage loans, trade finance, and a full range of depository accounts. It generates its revenue from interest received on loans and leases and, to a lesser extent, from interest received on investment securities and derives income from noninterest sources, such as fees received in connection with various lending and deposit services, loan servicing, gain on sales of loans, and wealth management services.
A Glimpse at RBB Bancorp's Dividend History
RBB Bancorp has maintained a consistent dividend payment record since 2017. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down RBB Bancorp's Dividend Yield and Growth
As of today, RBB Bancorp currently has a 12-month trailing dividend yield of 5.23% and a 12-month forward dividend yield of 5.43%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, RBB Bancorp's annual dividend growth rate was 11.90%. Extended to a five-year horizon, this rate increased to 35.60% per year.
Based on RBB Bancorp's dividend yield and five-year growth rate, the 5-year yield on cost of RBB Bancorp stock as of today is approximately 23.98%.
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. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, RBB Bancorp's dividend payout ratio is 0.23.
RBB Bancorp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks RBB Bancorp's profitability 5 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 9 years out of past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. RBB Bancorp's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and RBB Bancorp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. RBB Bancorp's revenue has increased by approximately 13.60% per year on average, a rate that outperforms approximately 79.37% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, RBB Bancorp's earnings increased by approximately 20.10% per year on average, a rate that outperforms approximately 74.92% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 13.20%, which outperforms approximately 65.86% of global competitors.
Next Steps
Considering RBB Bancorp's impressive dividend growth rate, reasonable payout ratio, fair profitability, and robust growth metrics, it seems that the company's dividend payments are sustainable in the long run. Investors seeking a stable income stream may consider RBB Bancorp as a viable option. However, as always, it is crucial to conduct thorough research and consider other financial aspects before making investment decisions.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
