Lakeland Bancorp (NASDAQ:LBAI) Has Affirmed Its Dividend Of $0.145

Lakeland Bancorp, Inc. (NASDAQ:LBAI) will pay a dividend of $0.145 on the 16th of August. This means that the annual payment will be 3.7% of the current stock price, which is in line with the average for the industry.

View our latest analysis for Lakeland Bancorp

Lakeland Bancorp's Earnings Will Easily Cover The Distributions

We aren't too impressed by dividend yields unless they can be sustained over time.

Lakeland Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 36%, which means that Lakeland Bancorp would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, earnings per share is forecast to fall by 0.9% over the next year. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 40%, which we are pretty comfortable with and we think would be feasible on an earnings basis.

Lakeland Bancorp Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the annual payment back then was $0.267, compared to the most recent full-year payment of $0.58. This implies that the company grew its distributions at a yearly rate of about 8.1% over that duration. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

Lakeland Bancorp Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Lakeland Bancorp has grown earnings per share at 5.6% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Lakeland Bancorp's prospects of growing its dividend payments in the future.

We Really Like Lakeland Bancorp's Dividend

Overall, we like to see the dividend staying consistent, and we think Lakeland Bancorp might even raise payments in the future. The earnings easily cover the company's distributions, and the company is generating plenty of cash. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Lakeland Bancorp that investors should take into consideration. Is Lakeland Bancorp not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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