Be Sure To Check Out United Bancorp, Inc. (NASDAQ:UBCP) Before It Goes Ex-Dividend

United Bancorp, Inc. (NASDAQ:UBCP) stock is about to trade ex-dividend in 4 days. This means that investors who purchase shares on or after the 9th of December will not receive the dividend, which will be paid on the 18th of December.

United Bancorp's upcoming dividend is US$0.14 a share, following on from the last 12 months, when the company distributed a total of US$0.57 per share to shareholders. Looking at the last 12 months of distributions, United Bancorp has a trailing yield of approximately 4.4% on its current stock price of $12.92. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for United Bancorp

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. United Bancorp paid out a comfortable 46% of its profit last year.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see how much of its profit United Bancorp paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Fortunately for readers, United Bancorp's earnings per share have been growing at 18% a year for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. United Bancorp's dividend payments are broadly unchanged compared to where they were 10 years ago.

Final Takeaway

From a dividend perspective, should investors buy or avoid United Bancorp? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. United Bancorp ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

In light of that, while United Bancorp has an appealing dividend, it's worth knowing the risks involved with this stock. Case in point: We've spotted 2 warning signs for United Bancorp you should be aware of.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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