BankFinancial Corporation Boosts Quarterly Dividend 12.5% (BFIN)

The BankFinancial Corporation (NASDAQ:BFIN) has been boosting its annual dividend aggressively over the past five years and hiked its quarterly dividend another 12.5% for its upcoming dividend distribution in late May.

While the company’s current dividend yield of only 2.1% might not be impressive compared to high-yield financial sectors, it is in line with the average yield of regional Midwest banks and nearly twice as high as BankFinancial Corporation’s own average yield over the past five years. In addition to the rising dividend over the past few years, the bank offered its shareholders asset appreciation that boosted the company’s share price by a double-digit percentage over the past 12 months and more than doubled in the past five years with minimal volatility.

Barring another major fiscal crisis, the BankFinancial Corporation’s share price and dividend income hikes seem immune from the fluctuations of other companies in the Financials sector and the overall equity markets. Therefore, investors seeking an equity that returns capital growth and dividend income should consider adding the BankFinancial Corporation to their portfolio. However, interested investors should complete their due diligence quickly and take action prior to the next ex-dividend date on May 15, 2018. The stock must be purchased before May 15 to receive the dividend payment 10 days later on May 25, 2018.

BankFinancial Corporation (NASDAQ:BFIN)

Headquartered in Burr Ridge, Illinois, and founded in 1924, the BankFinancial Corporation operates as the holding company for BankFinancial, National Association (NA) that provides banking products and services in Illinois. A National Association is a banking institution chartered and supervised by the Office of the Comptroller of the Currency (OCC) – an agency in the U.S. Treasury Department – pursuant to the National Bank Act. BankFinancial provides customary banking products and services, including deposit and retirement accounts, as well as loans, trusts, wealth management and insurance. As of March 2018, the bank operated 19 full-service banking offices located in Cook, DuPage, Lake and Will Counties in Illinois.

Over the past 12 months, the company’s share price continued its nearly uninterrupted growth trend that started in January 2012. The share price dipped just 3.8% in the first 10 days of the trailing 12-month period and reached its 52-week low on May 19, 2017. After that quick dip, the share price resumed its uptrend and gained nearly 20% before closing on May 8, 2018, at its 52-week high of $17.36. In addition to being the new 52-week high, the $17.36 closing price was 15% higher than it was one year earlier and 114% above its price level five years ago.

The company boosted its quarterly dividend 12.5% from the $0.08 quarterly period to the current $0.09 dividend distribution. This new quarterly distribution is equivalent to a 2.1% dividend yield and a $0.36 annualized dividend for 2018. The company’s current yield is nearly 73% higher than its own 1.2% average yield over the past five years. Additionally, BankFinancial’s current yield is 26% higher than the simple average of the entire Regional Midwest Banks market segment and just slightly below the 2.2% average yield of only dividend-paying companies in the segment.

BankFinancial paused its annual dividend hikes in 2008 amid the financial crisis and paid a flat $0.07 quarterly dividend for the next 19 consecutive quarters. However, the company cut its quarterly dividend for the fourth quarter of 2011 and paid only three dividend installments in 2012. The BankFinancial Corporation resumed hiking its dividend in 2014 and doubled its annual dividend amount over each of the following two years. By 2017, the company managed to return its annual dividend to the same $0.28 level it paid in 2010 before the dividend cut. Over the past five years, the company advanced its annual dividend at an average growth rate of 51.3% per year, which resulted in a 12-fold increase since 2013.

The combination of the rising dividend income and the steady asset appreciation rewarded BankFinancial’s shareholders with a total return of nearly 16% over the past 12 months, a 43.8% total return over the past three years and a 120% return over the last five years.

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