Lakeland Bancorp's (NASDAQ:LBAI) Dividend Will Be $0.145

The board of Lakeland Bancorp, Inc. (NASDAQ:LBAI) has announced that it will pay a dividend on the 17th of May, with investors receiving $0.145 per share. Based on this payment, the dividend yield will be 4.0%, which is fairly typical for the industry.

View our latest analysis for Lakeland Bancorp

Lakeland Bancorp's Dividend Forecasted To Be Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Having distributed dividends for at least 10 years, Lakeland Bancorp has a long 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 shows 34%, 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 rise by 7.1% over the next year. If the dividend continues along recent trends, we estimate the future payout ratio will be 34%, which is in the range that makes us comfortable with the sustainability of the dividend.

Lakeland Bancorp Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.229 in 2013 to the most recent total annual payment of $0.58. This works out to be a compound annual growth rate (CAGR) of approximately 9.8% a year over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

We Could See Lakeland Bancorp's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Lakeland Bancorp has seen EPS rising for the last five years, at 7.9% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Lakeland Bancorp Looks Like A Great Dividend Stock

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. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 3 Lakeland Bancorp analysts we track are forecasting continued growth with our free report on analyst estimates for the company. 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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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.