The board of BayCom Corp (NASDAQ:BCML) has announced that it will pay a dividend on the 10th of October, with investors receiving $0.10 per share. This means the annual payment will be 1.7% of the current stock price, which is lower than the industry average.

See our latest analysis for BayCom

BayCom's Dividend Forecasted To Be Well Covered By Earnings

Even a low dividend yield can be attractive if it is sustained for years on end.

BayCom has a short history of paying out dividends, with its current track record at only 3 years. Despite the company's shorter dividend history however, calculating for its payout ratio of 19% shows that BayCom is able to comfortably pay dividends.

EPS is set to fall by 1.0% over the next 12 months. But if the dividend continues along recent trends, we estimate the future payout ratio could be 18%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business in the future.

BayCom Is Still Building Its Track Record

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. Since 2021, the dividend has gone from $0.20 total annually to $0.40. This works out to be a compound annual growth rate (CAGR) of approximately 26% a year over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. BayCom has seen EPS rising for the last five years, at 13% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

BayCom Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think BayCom might even raise payments in the future. The earnings easily cover the company's distributions, and the company is generating plenty of cash. 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. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've identified 2 warning signs for BayCom (1 shouldn't be ignored!) that you should be aware of before investing. Is BayCom not quite the opportunity you were looking for? Why not check out our selection of top 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.