Princeton Bancorp (NASDAQ:BPRN) Is Paying Out A Dividend Of $0.30

The board of Princeton Bancorp, Inc. (NASDAQ:BPRN) has announced that it will pay a dividend on the 1st of March, with investors receiving $0.30 per share. This payment means that the dividend yield will be 3.6%, which is around the industry average.

Check out our latest analysis for Princeton Bancorp

Princeton Bancorp's Earnings Will Easily Cover The Distributions

Solid dividend yields are great, but they only really help us if the payment is sustainable.

Having paid out dividends for 5 years, Princeton Bancorp has a good history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio of 29%shows that Princeton Bancorp would be able to pay its last dividend without pressure on the balance sheet.

EPS is set to fall by 39.3% over the next 3 years. Fortunately, analysts forecast the future payout ratio to be 46% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.

Princeton Bancorp Is Still Building Its Track Record

The dividend's track record has been pretty solid, but with only 5 years of history we want to see a few more years of history before making any solid conclusions. Since 2019, the dividend has gone from $0.12 total annually to $1.20. This works out to be a compound annual growth rate (CAGR) of approximately 58% a year over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Princeton Bancorp has impressed us by growing EPS at 13% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

We Really Like Princeton Bancorp's Dividend

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The earnings easily cover the company's distributions, and the company is generating plenty of cash. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. 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. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 2 warning signs for Princeton Bancorp (1 shouldn't be ignored!) that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield 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.