Bryn Mawr Bank (NASDAQ:BMTC) Has Announced That It Will Be Increasing Its Dividend To US$0.28

Bryn Mawr Bank Corporation (NASDAQ:BMTC) has announced that it will be increasing its dividend on the 1st of September to US$0.28. Based on the announced payment, the dividend yield for the company will be 2.8%, which is fairly typical for the industry.

See our latest analysis for Bryn Mawr Bank

Bryn Mawr Bank's Dividend Is Well Covered By Earnings

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. Before making this announcement, Bryn Mawr Bank was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to fall by 14.5%. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 40%, which is comfortable for the company to continue in the future.

Bryn Mawr Bank Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2011, the dividend has gone from US$0.56 to US$1.12. This means that it has been growing its distributions at 7.2% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see Bryn Mawr Bank has been growing its earnings per share at 26% a year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

We Really Like Bryn Mawr Bank's Dividend

Overall, a dividend increase is always good, and we think that Bryn Mawr Bank is a strong income stock thanks to its track record and growing earnings. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. 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 Bryn Mawr Bank that you should be aware of before investing. We have also put together a list of global stocks with a solid dividend.

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