BancFirst Corporation's (NASDAQ:BANF) investors are due to receive a payment of $0.46 per share on 15th of April. Even though the dividend went up, the yield is still quite low at only 1.6%.

View our latest analysis for BancFirst

BancFirst's Dividend Forecasted To Be Well Covered By Earnings

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

BancFirst has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but BancFirst's payout ratio of 27% is a good sign as this means that earnings decently cover dividends.

Looking forward, earnings per share is forecast to fall by 1.8% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 30% over the same time period, which is in a pretty comfortable range.

BancFirst Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2015, the annual payment back then was $0.62, compared to the most recent full-year payment of $1.84. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

We Could See BancFirst's Dividend Growing

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. BancFirst has impressed us by growing EPS at 9.5% per year over the past five years. BancFirst definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like BancFirst's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for BancFirst that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.