Is It Smart To Buy Bryn Mawr Bank Corporation (NASDAQ:BMTC) Before It Goes Ex-Dividend?

Bryn Mawr Bank Corporation (NASDAQ:BMTC) stock is about to trade ex-dividend in three days. Investors can purchase shares before the 29th of January in order to be eligible for this dividend, which will be paid on the 1st of March.

Bryn Mawr Bank's next dividend payment will be US$0.27 per share, and in the last 12 months, the company paid a total of US$1.08 per share. Looking at the last 12 months of distributions, Bryn Mawr Bank has a trailing yield of approximately 3.2% on its current stock price of $33.37. If you buy this business for its dividend, you should have an idea of whether Bryn Mawr Bank's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

Check out our latest analysis for Bryn Mawr Bank

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Bryn Mawr Bank paid out more than half (65%) of its earnings last year, which is a regular payout ratio for most companies.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

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

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. For this reason, we're glad to see Bryn Mawr Bank's earnings per share have risen 11% per annum over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Bryn Mawr Bank has delivered an average of 6.8% per year annual increase in its dividend, based on the past 10 years of dividend payments. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

To Sum It Up

Has Bryn Mawr Bank got what it takes to maintain its dividend payments? Earnings per share are growing at an attractive rate, and Bryn Mawr Bank is paying out a bit over half its profits. Overall, Bryn Mawr Bank looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

So while Bryn Mawr Bank looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 1 warning sign for Bryn Mawr Bank that we recommend you consider before investing in the business.

If you're in the market for dividend stocks, we recommend checking our list of top 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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