Be Sure To Check Out Bar Harbor Bankshares (NYSEMKT:BHB) Before It Goes Ex-Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Bar Harbor Bankshares (NYSEMKT:BHB) is about to trade ex-dividend in the next 4 days. If you purchase the stock on or after the 17th of February, you won't be eligible to receive this dividend, when it is paid on the 18th of March.

Bar Harbor Bankshares's upcoming dividend is US$0.22 a share, following on from the last 12 months, when the company distributed a total of US$0.88 per share to shareholders. Calculating the last year's worth of payments shows that Bar Harbor Bankshares has a trailing yield of 3.6% on the current share price of $24.38. If you buy this business for its dividend, you should have an idea of whether Bar Harbor Bankshares's dividend is reliable and sustainable. As a result, readers should always check whether Bar Harbor Bankshares has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Bar Harbor Bankshares

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. Bar Harbor Bankshares paid out a comfortable 40% 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 Bar Harbor Bankshares paid out over the last 12 months.

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 decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at Bar Harbor Bankshares, with earnings per share up 5.2% on average over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Bar Harbor Bankshares has lifted its dividend by approximately 6.7% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

Final Takeaway

Is Bar Harbor Bankshares worth buying for its dividend? Bar Harbor Bankshares has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. We think this is a pretty attractive combination, and would be interested in investigating Bar Harbor Bankshares more closely.

Want to learn more about Bar Harbor Bankshares? Here's a visualisation of its historical rate of revenue and earnings growth.

If you're in the market for dividend stocks, we recommend checking our list of top 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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