Why You Might Be Interested In Virginia National Bankshares Corporation (NASDAQ:VABK) For Its Upcoming Dividend

By
Simply Wall St
Published
September 04, 2021
NasdaqCM:VABK
Source: Shutterstock

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Virginia National Bankshares Corporation (NASDAQ:VABK) is about to go ex-dividend in just 3 days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the 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. In other words, investors can purchase Virginia National Bankshares' shares before the 9th of September in order to be eligible for the dividend, which will be paid on the 24th of September.

The company's next dividend payment will be US$0.30 per share, on the back of last year when the company paid a total of US$1.20 to shareholders. Last year's total dividend payments show that Virginia National Bankshares has a trailing yield of 3.2% on the current share price of $37.1683. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Virginia National Bankshares

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Virginia National Bankshares paid out 66% of its earnings to investors last year, a normal payout level for most businesses.

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

Click here to see how much of its profit Virginia National Bankshares paid out over the last 12 months.

historic-dividend
NasdaqCM:VABK Historic Dividend September 5th 2021

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, Virginia National Bankshares's earnings per share have been growing at 10% 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. In the past eight years, Virginia National Bankshares has increased its dividend at approximately 27% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

Final Takeaway

From a dividend perspective, should investors buy or avoid Virginia National Bankshares? Earnings per share are growing at an attractive rate, and Virginia National Bankshares is paying out a bit over half its profits. Virginia National Bankshares 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.

On that note, you'll want to research what risks Virginia National Bankshares is facing. For example, we've found 4 warning signs for Virginia National Bankshares (1 can't be ignored!) that deserve your attention before investing in the shares.

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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