Bridge Bancorp, Inc. (NASDAQ:BDGE) Passed Our Checks, And It's About To Pay A US$0.24 Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Bridge Bancorp, Inc. (NASDAQ:BDGE) is about to trade ex-dividend in the next 4 days. If you purchase the stock on or after the 4th of February, you won't be eligible to receive this dividend, when it is paid on the 12th of February.

Bridge Bancorp's next dividend payment will be US$0.24 per share, on the back of last year when the company paid a total of US$0.96 to shareholders. Calculating the last year's worth of payments shows that Bridge Bancorp has a trailing yield of 3.9% on the current share price of $24.43. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for Bridge Bancorp

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Bridge Bancorp's payout ratio is modest, at just 40% of profit.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Fortunately for readers, Bridge Bancorp's earnings per share have been growing at 11% a year for the past five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. It looks like the Bridge Bancorp dividends are largely the same as they were 10 years ago.

Final Takeaway

Is Bridge Bancorp worth buying for its dividend? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. We think this is a pretty attractive combination, and would be interested in investigating Bridge Bancorp more closely.

In light of that, while Bridge Bancorp has an appealing dividend, it's worth knowing the risks involved with this stock. For example, we've found 1 warning sign for Bridge Bancorp that we recommend you consider before investing in the business.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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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