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Should You Buy County Bancorp Inc (NASDAQ:ICBK) For Its Dividend?

A sizeable part of portfolio returns can be produced by dividend stocks due to their contribution to compounding returns in the long run. County Bancorp Inc (NASDAQ:ICBK) has recently paid dividends to shareholders, and currently yields 1.1%. Does County Bancorp tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis.

Check out our latest analysis for County Bancorp

5 questions I ask before picking a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

  • Is their annual yield among the top 25% of dividend payers?

  • Has it paid dividend every year without dramatically reducing payout in the past?

  • Has the amount of dividend per share grown over the past?

  • Can it afford to pay the current rate of dividends from its earnings?

  • Will it have the ability to keep paying its dividends going forward?

NasdaqGM:ICBK Historical Dividend Yield August 28th 18
NasdaqGM:ICBK Historical Dividend Yield August 28th 18

How does County Bancorp fare?

The current trailing twelve-month payout ratio for the stock is 13.1%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect ICBK’s payout to remain around the same level at 14.3% of its earnings, which leads to a dividend yield of 1.2%. Moreover, EPS should increase to $2.17.

If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality is that it is too early to consider County Bancorp as a dividend investment. It has only been consistently paying dividends for 4 years, however, standard practice for reliable payers is to look for a 10-year minimum track record.

In terms of its peers, County Bancorp has a yield of 1.1%, which is on the low-side for Banks stocks.

Next Steps:

Now you know to keep in mind the reason why investors should be careful investing in County Bancorp for the dividend. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. There are three important factors you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for ICBK’s future growth? Take a look at our free research report of analyst consensus for ICBK’s outlook.

  2. Valuation: What is ICBK worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether ICBK is currently mispriced by the market.

  3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.

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