Is Buying Mercantile Bank Corporation (NASDAQ:MBWM) For Its Upcoming $0.22 Dividend A Good Choice?
Have you been keeping an eye on Mercantile Bank Corporation’s (NASDAQ:MBWM) upcoming dividend of $0.22 per share payable on the 20 June 2018? Then you only have 3 days left before the stock starts trading ex-dividend on the 07 June 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Mercantile Bank’s latest financial data to analyse its dividend characteristics. View our latest analysis for Mercantile Bank
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
Does it pay an annual yield higher than 75% of dividend payers?
Has it paid dividend every year without dramatically reducing payout in the past?
Has dividend per share risen in the past couple of years?
Is it able to pay the current rate of dividends from its earnings?
Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Mercantile Bank fare?
Mercantile Bank has a trailing twelve-month payout ratio of 37.30%, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. In terms of its peers, Mercantile Bank produces a yield of 2.43%, which is on the low-side for Banks stocks.
Next Steps:
Whilst there are few things you may like about Mercantile Bank from a dividend stock perspective, the truth is that overall it probably is not the best choice for a dividend investor. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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. Below, I’ve compiled three essential factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for MBWM’s future growth? Take a look at our free research report of analyst consensus for MBWM’s outlook.
Valuation: What is MBWM 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 MBWM is currently mispriced by the market.
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 pass 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.
