Macatawa Bank (NASDAQ:MCBC) Will Pay A Dividend Of $0.09

Macatawa Bank Corporation (NASDAQ:MCBC) will pay a dividend of $0.09 on the 28th of February. This means that the annual payment will be 3.2% of the current stock price, which is in line with the average for the industry.

See 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 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 26%, which means that Macatawa Bank would be able to pay its last dividend without pressure on the balance sheet.

Over the next 3 years, EPS is forecast to expand by 0.6%. Analysts estimate the future payout ratio will be 30% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

Macatawa Bank Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.08, compared to the most recent full-year payment of $0.36. This means that it has been growing its distributions at 16% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Macatawa Bank has impressed us by growing EPS at 10% per year over the past five years. Macatawa Bank definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Macatawa Bank's Dividend

Overall, we like to see the dividend staying consistent, and we think Macatawa Bank might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Now, if you want to look closer, it would be worth checking out our free research on Macatawa Bank management tenure, salary, and performance. Is Macatawa Bank 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.