Yahoo Finance MidWestOne Financial Group (NASDAQ:MOFG) Is Due To Pay A Dividend Of $0.2425
MidWestOne Financial Group, Inc. (NASDAQ:MOFG) will pay a dividend of $0.2425 on the 17th of June. Based on this payment, the dividend yield on the company's stock will be 4.6%, which is an attractive boost to shareholder returns.
Check out our latest analysis for MidWestOne Financial Group
MidWestOne Financial Group's Payment Expected To Have Solid Earnings Coverage
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
Having distributed dividends for at least 10 years, MidWestOne Financial Group has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 67%, which means that MidWestOne Financial Group would be able to pay its last dividend without pressure on the balance sheet.
The next year is set to see EPS grow by 37.0%. If the dividend continues on this path, the future payout ratio could be 52% by next year, which we think can be pretty sustainable going forward.
MidWestOne Financial Group Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.50, compared to the most recent full-year payment of $0.97. This means that it has been growing its distributions at 6.9% per annum over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
Dividend Growth Potential Is Shaky
Investors could be attracted to the stock based on the quality of its payment history. Let's not jump to conclusions as things might not be as good as they appear on the surface. Earnings per share has been sinking by 10% over the last five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future. It's not all bad news though, as the earnings are predicted to rise over the next 12 months - we would just be a bit cautious until this becomes a long term trend.
Our Thoughts On MidWestOne Financial Group's Dividend
Overall, a consistent dividend is a good thing, and we think that MidWestOne Financial Group has the ability to continue this into the future. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for MidWestOne Financial Group that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
