MidWestOne Financial Group (NASDAQ:MOFG) Will Pay A Dividend Of $0.2425

The board of MidWestOne Financial Group, Inc. (NASDAQ:MOFG) has announced that it will pay a dividend on the 15th of December, with investors receiving $0.2425 per share. The dividend yield will be 4.5% based on this payment which is still above the industry average.

View our latest analysis for MidWestOne Financial Group

MidWestOne Financial Group's Dividend Forecasted To Be Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much.

MidWestOne Financial Group has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on MidWestOne Financial Group's last earnings report, the payout ratio is at a decent 44%, meaning that the company is able to pay out its dividend with a bit of room to spare.

The next 3 years are set to see EPS grow by 70.7%. The future payout ratio could be 36% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

MidWestOne Financial Group Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.50 in 2013, and the most recent fiscal year payment was $0.97. This works out to be a compound annual growth rate (CAGR) of approximately 6.9% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

Dividend Growth May Be Hard To Achieve

The company's investors will be pleased to have been receiving dividend income for some time. Earnings have grown at around 4.7% a year for the past five years, which isn't massive but still better than seeing them shrink. MidWestOne Financial Group is struggling to find viable investments, so it is returning more to shareholders. This could mean the dividend doesn't have the growth potential we look for going into the future.

MidWestOne Financial Group Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. 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 in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for MidWestOne Financial Group 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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