Riverview Bancorp (NASDAQ:RVSB) Has Affirmed Its Dividend Of $0.02

Riverview Bancorp, Inc. (NASDAQ:RVSB) will pay a dividend of $0.02 on the 22nd of July. This means the annual payment will be 1.5% of the current stock price, which is lower than the industry average.

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Riverview Bancorp's Payment Expected To Have Solid Earnings Coverage

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.

Having distributed dividends for at least 10 years, Riverview Bancorp has a long history of paying out a part of its earnings to shareholders. Based on Riverview Bancorp's last earnings report, the payout ratio is at a decent 34%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next 3 years, EPS is forecast to expand by 127.3%. The future payout ratio could be 19% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Check out our latest analysis for Riverview Bancorp

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. The dividend has gone from an annual total of $0.045 in 2015 to the most recent total annual payment of $0.08. This works out to be a compound annual growth rate (CAGR) of approximately 5.9% a year over that time. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Riverview Bancorp might have put its house in order since then, but we remain cautious.

Dividend Growth Potential Is Shaky

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Earnings per share has been sinking by 20% over the last five years. A sharp decline in earnings per share is not great from from a dividend perspective. Even conservative payout ratios can come under pressure if earnings fall far enough. On the bright side, earnings are predicted to gain some ground over the next year, but until this turns into a pattern we wouldn't be feeling too comfortable.

Our Thoughts On Riverview Bancorp's Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While Riverview Bancorp is earning enough to cover the dividend, we are generally unimpressed with its future prospects. Overall, we don't think this company has the makings of a good income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Riverview Bancorp stock. If you are a dividend investor, you might also want to look at our curated list of high yield 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.