Mid Penn Bancorp (NASDAQ:MPB) Is Paying Out A Dividend Of $0.20

Mid Penn Bancorp, Inc. (NASDAQ:MPB) will pay a dividend of $0.20 on the 25th of November. Including this payment, the dividend yield on the stock will be 2.5%, which is a modest boost for shareholders' returns.

See our latest analysis for Mid Penn Bancorp

Mid Penn Bancorp's Dividend Forecasted To Be Well Covered By Earnings

It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable.

Mid Penn Bancorp 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 27%, which means that Mid Penn Bancorp would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, EPS is forecast to rise by 28.6% over the next 3 years. Analysts estimate the future payout ratio will be 23% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The annual payment during the last 10 years was $0.20 in 2014, and the most recent fiscal year payment was $0.80. This implies that the company grew its distributions at a yearly rate of about 15% over that duration. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

We Could See Mid Penn Bancorp's Dividend Growing

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Mid Penn Bancorp has seen EPS rising for the last five years, at 6.6% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Mid Penn Bancorp's prospects of growing its dividend payments in the future.

Our Thoughts On Mid Penn Bancorp's Dividend

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Mid Penn Bancorp that investors should take into consideration. Is Mid Penn Bancorp not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.