Bendigo and Adelaide Bank Limited (ASX:BEN) will pay a dividend of A$0.33 on the 30th of September. Based on this payment, the dividend yield will be 4.7%, which is fairly typical for the industry.

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Bendigo and Adelaide Bank's Payment Expected To Have Solid Earnings Coverage

Unless the payments are sustainable, the dividend yield doesn't mean too much.

Having distributed dividends for at least 10 years, Bendigo and Adelaide Bank has a long history of paying out a part of its earnings to shareholders. But while this history shows that the company was able to sustain its dividend for a decent period of time, its most recent earnings report shows that the company did not make enough earnings to cover its dividend payout. This is an alarming sign for the sustainability of its dividends, as it may mean that Bendigo and Adelaide Bankis pulling cash from elsewhere to keep its shareholders happy.

Looking forward, EPS is forecast to rise by 113.1% over the next 3 years. Analysts estimate the future payout ratio will be 66% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.ASX:BEN Historic Dividend August 27th 2025

Check out our latest analysis for Bendigo and Adelaide Bank

Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The annual payment during the last 10 years was A$0.66 in 2015, and the most recent fiscal year payment was A$0.63. The dividend has shrunk at a rate of less than 1% a year over this period. A company that decreases its dividend over time generally isn't what we are looking for.

Bendigo and Adelaide Bank May Find It Hard To Grow The Dividend

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. It's not great to see that Bendigo and Adelaide Bank's earnings per share has fallen at approximately 3.2% per year over the past five years. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed. It's not all bad news though, as the earnings are predicted to rise over the next 12 months - we would just be a bit cautious until this can turn into a longer term trend.

Bendigo and Adelaide Bank's Dividend Doesn't Look Great

Overall, this isn't a great candidate as an income investment, even though the dividend was stable this year. The company isn't making enough to be paying as much as it is, and the other factors don't look particularly promising either. Overall, this doesn't get us very excited from an income standpoint.

Story Continues

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Bendigo and Adelaide Bank that investors should take into consideration. Is Bendigo and Adelaide Bank 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.

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