Small Community Bank With 22 Years Of Dividend Growth
The regional bank industry is interesting for dividend investors.
They’re similar to the larger national banks, but the size differences among regional banks can be enormous.
Some regional banks are worth over $100 billion, while others are only a few million.
Smaller regional banks don’t get enough attention… and we can find some great ones nobody’s talking about!
Bar Harbor Bankshares (ticker: BHB) is a small regional bank operating in Maine, New Hampshire, and Vermont.
It’s only worth around $600 million, so the company is barely on anyone’s radar.
But Bar Harbor has a great dividend, despite its size.
Its 4% dividend yield is higher than the yield for most other regional banks.
And over the past 20 years, Bar Harbor has averaged over 6% growth in its dividend each year.
Its next dividend increase is just around the corner.
Bar Harbor is raising its quarterly dividend to $0.34, which is 6.25% higher than its last payment.
But you can’t wait too long.
You need to own Bar Harbor by May 20 (Wednesday) to get the higher payment.
Bar Harbor’s historical dividend growth is pretty unique.
For a while, Bar Harbor would raise its dividend every quarter.
During the financial crash in 2008, Bar Harbor changed to annual increases.
Most banks stopped raising their dividends, or cut payments during the financial crash.
Bar Harbor then resumed quarterly increases a few years later, but went back to yearly raises in 2017.
You would think raising the dividend every quarter is better than once per year, but it doesn’t really matter.
The growth is still the same since the quarterly growth rates are lower.
Bar Harbor’s dividend payout ratio is also low and stable, which is just where we want it.
Last year, it only paid out 38% of its earnings in dividends, and has paid out between 30 and 50% for the past 20 years.
Bar Harbor is more than just its dividend.
Its debt-to-equity ratio is only 0.4x, which is lower than most other regional banks and near an all-time low for Bar Harbor.
And its growth is really good for a regional bank.
Over the past decade, Bar Harbor has grown its earnings on average by 7.5% each year.
A low payout ratio along with earnings growing faster than the dividend is a great sign Bar Harbor can continue to grow its dividend for a long time.
What’s your favorite regional bank?
Michael Jennings
Dividend Stocks Research
Category: Dividend Stocks To Buy?
