Peoples Bancorp of North Carolina (NASDAQ:PEBK) Has Affirmed Its Dividend Of $0.18

Peoples Bancorp of North Carolina, Inc.'s (NASDAQ:PEBK) investors are due to receive a payment of $0.18 per share on 15th of September. This means the dividend yield will be fairly typical at 2.8%.

View our latest analysis for Peoples Bancorp of North Carolina

Peoples Bancorp of North Carolina's Earnings Will Easily Cover The Distributions

Solid dividend yields are great, but they only really help us if the payment is sustainable.

Having distributed dividends for at least 10 years, Peoples Bancorp of North Carolina has a long history of paying out a part of its earnings to shareholders. Based on Peoples Bancorp of North Carolina's last earnings report, the payout ratio is at a decent 29%, meaning that the company is able to pay out its dividend with a bit of room to spare.

If the trend of the last few years continues, EPS will grow by 9.6% over the next 12 months. If the dividend continues on this path, the future payout ratio could be 38% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

Although the company has a long dividend history, it has been cut at least once in the last 10 years. Since 2012, the annual payment back then was $0.0727, compared to the most recent full-year payment of $0.72. This means that it has been growing its distributions at 26% per annum over that time. Dividends have grown rapidly over this time, but with cuts in the past we are not certain that this stock will be a reliable source of income in the future.

The Dividend Has Growth Potential

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Peoples Bancorp of North Carolina has seen EPS rising for the last five years, at 9.6% per annum. Peoples Bancorp of North Carolina definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Peoples Bancorp of North Carolina's Dividend

Overall, we like to see the dividend staying consistent, and we think Peoples Bancorp of North Carolina might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for Peoples Bancorp of North Carolina 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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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.