Macatawa Bank (NASDAQ:MCBC) Is Paying Out A Dividend Of $0.08

Macatawa Bank Corporation's (NASDAQ:MCBC) investors are due to receive a payment of $0.08 per share on 30th of May. This payment means that the dividend yield will be 3.3%, which is around the industry average.

Check out our latest analysis for Macatawa Bank

Macatawa Bank's Payment Expected To Have Solid Earnings Coverage

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Macatawa Bank has established itself as a dividend paying company, given its 9-year history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio of 27%shows that Macatawa Bank would be able to pay its last dividend without pressure on the balance sheet.

Over the next year, EPS is forecast to expand by 0.01%. If the dividend continues on this path, the future payout ratio could be 31% by next year, which we think can be pretty sustainable going forward.

Macatawa Bank Is Still Building Its Track Record

Macatawa Bank's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The annual payment during the last 9 years was $0.08 in 2014, and the most recent fiscal year payment was $0.32. This works out to be a compound annual growth rate (CAGR) of approximately 17% 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

The company's investors will be pleased to have been receiving dividend income for some time. Macatawa Bank has impressed us by growing EPS at 18% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Macatawa Bank's prospects of growing its dividend payments in the future.

Macatawa Bank Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Macatawa Bank might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

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. As an example, we've identified 1 warning sign for Macatawa Bank that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.