PCB Bancorp (NASDAQ:PCB) Is Due To Pay A Dividend Of $0.18

The board of PCB Bancorp (NASDAQ:PCB) has announced that it will pay a dividend of $0.18 per share on the 17th of May. The dividend yield will be 4.9% based on this payment which is still above the industry average.

View our latest analysis for PCB Bancorp

PCB Bancorp's Payment Expected To Have Solid Earnings Coverage

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

PCB Bancorp has a good history of paying out dividends, with its current track record at 9 years. Past distributions do not necessarily guarantee future ones, but PCB Bancorp's payout ratio of 41% is a good sign for current shareholders as this means that earnings decently cover dividends.

Over the next year, EPS is forecast to expand by 2.0%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 51% by next year, which is in a pretty sustainable range.

PCB Bancorp Is Still Building Its Track Record

PCB Bancorp's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The annual payment during the last 9 years was $0.109 in 2015, and the most recent fiscal year payment was $0.72. This means that it has been growing its distributions at 23% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

The Dividend's Growth Prospects Are Limited

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Although it's important to note that PCB Bancorp's earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time. PCB Bancorp 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.

Our Thoughts On PCB Bancorp's Dividend

Overall, a consistent dividend is a good thing, and we think that PCB Bancorp has the ability to continue this into 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.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for PCB Bancorp that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield 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.