Peapack-Gladstone Financial Corporation (NASDAQ:PGC) Pays A US$0.05 Dividend In Just Three Days

Peapack-Gladstone Financial Corporation (NASDAQ:PGC) stock is about to trade ex-dividend in 3 days. Typically, the ex-dividend date is one business day before the record date, which is the date on which a company determines the shareholders eligible to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Therefore, if you purchase Peapack-Gladstone Financial's shares on or after the 6th of November, you won't be eligible to receive the dividend, when it is paid on the 28th of November.

The company's next dividend payment will be US$0.05 per share. Last year, in total, the company distributed US$0.20 to shareholders. Looking at the last 12 months of distributions, Peapack-Gladstone Financial has a trailing yield of approximately 0.8% on its current stock price of US$25.30. If you buy this business for its dividend, you should have an idea of whether Peapack-Gladstone Financial's dividend is reliable and sustainable. As a result, readers should always check whether Peapack-Gladstone Financial has been able to grow its dividends, or if the dividend might be cut.

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Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Peapack-Gladstone Financial has a low and conservative payout ratio of just 10% of its income after tax.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

View our latest analysis for Peapack-Gladstone Financial

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's not ideal to see Peapack-Gladstone Financial's earnings per share have been shrinking at 4.3% a year over the previous five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Peapack-Gladstone Financial's dividend payments are broadly unchanged compared to where they were 10 years ago. If a company's dividend stays flat while earnings are in decline, this is typically a sign that it is paying out a larger percentage of its earnings. This can become unsustainable if earnings fall far enough.

Final Takeaway

Should investors buy Peapack-Gladstone Financial for the upcoming dividend? Peapack-Gladstone Financial's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. At best we would put it on a watch-list to see if business conditions improve, as it doesn't look like a clear opportunity right now.

However if you're still interested in Peapack-Gladstone Financial as a potential investment, you should definitely consider some of the risks involved with Peapack-Gladstone Financial. In terms of investment risks, we've identified 1 warning sign with Peapack-Gladstone Financial and understanding them should be part of your investment process.

If you're in the market for strong dividend payers, we recommend checking our selection of top 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.