Midland States Bancorp's (NASDAQ:MSBI) Dividend Will Be $0.29

The board of Midland States Bancorp, Inc. (NASDAQ:MSBI) has announced that it will pay a dividend on the 26th of August, with investors receiving $0.29 per share. The dividend yield will be 4.1% based on this payment which is still above the industry average.

View our latest analysis for Midland States Bancorp

Midland States Bancorp's Earnings Will Easily Cover The Distributions

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

Midland States Bancorp has a good history of paying out dividends, with its current track record at 6 years. Past distributions do not necessarily guarantee future ones, but Midland States Bancorp's payout ratio of 30% is a good sign for current shareholders as this means that earnings decently cover dividends.

The next 3 years are set to see EPS grow by 8.6%. 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.

Midland States Bancorp Doesn't Have A Long Payment History

It is great to see that Midland States Bancorp has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2016, the dividend has gone from $0.72 total annually to $1.16. This implies that the company grew its distributions at a yearly rate of about 8.3% over that duration. Investors will likely want to see a longer track record of growth before making decision to add this to their income portfolio.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Midland States Bancorp has seen EPS rising for the last five years, at 14% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Midland States Bancorp's prospects of growing its dividend payments in the future.

We Really Like Midland States Bancorp's Dividend

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for Midland States Bancorp that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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.