Mid Penn Bancorp, Inc. (NASDAQ:MPB) stock is about to trade ex-dividend in 4 days time. This means that investors who purchase shares on or after the 5th of November will not receive the dividend, which will be paid on the 25th of November.
Mid Penn Bancorp's next dividend payment will be US$0.2 per share. Last year, in total, the company distributed US$0.8 to shareholders. Looking at the last 12 months of distributions, Mid Penn Bancorp has a trailing yield of approximately 3.1% on its current stock price of $26.37. If you buy this business for its dividend, you should have an idea of whether Mid Penn Bancorp's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Mid Penn Bancorp paid out a comfortable 33% of its profit last year.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see Mid Penn Bancorp earnings per share are up 9.8% per annum over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. It looks like the Mid Penn Bancorp dividends are largely the same as they were ten years ago.
Is Mid Penn Bancorp an attractive dividend stock, or better left on the shelf? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Overall, Mid Penn Bancorp looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
Keen to explore more data on Mid Penn Bancorp's financial performance? Check out our visualisation of its historical revenue and earnings growth.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.