Nicolet Bankshares' (NYSE:NIC) Shareholders Will Receive A Bigger Dividend Than Last Year

The board of Nicolet Bankshares, Inc. (NYSE:NIC) has announced that it will be increasing its dividend by 12% on the 14th of June to $0.28, up from last year's comparable payment of $0.25. Even though the dividend went up, the yield is still quite low at only 1.2%.

View our latest analysis for Nicolet Bankshares

Nicolet Bankshares' Earnings Will Easily Cover The Distributions

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Currently, Nicolet Bankshares does not yet have a history of paying dividends out, with this being its first year doing so. While this gives us less confidence in Nicolet Bankshares' long-term dividend potential, the company's payout ratio of 15%is a great sign for current shareholders, as this means that earnings greatly cover dividends.

The next year is set to see EPS grow by 3.5%. If the dividend continues along recent trends, we estimate the future payout ratio will be 17%, which is in the range that makes us comfortable with the sustainability of the dividend.

Nicolet Bankshares Is Still Building Its Track Record

The company hasn't been paying a dividend for very long at all, so we can't really make a judgement on how stable the dividend has been. This doesn't mean that the company can't pay a good dividend, but just that we want to wait until it can prove itself.

We Could See Nicolet Bankshares' Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Nicolet Bankshares has seen EPS rising for the last five years, at 8.6% per annum. Nicolet Bankshares definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Nicolet Bankshares Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Nicolet Bankshares that you should be aware of before investing. Is Nicolet Bankshares not quite the opportunity you were looking for? Why not check out 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.