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Should Income Investors Buy United Bancorp Inc (NASDAQ:UBCP) Before Its Ex-Dividend?

Vernon Smith

Important news for shareholders and potential investors in United Bancorp Inc (NASDAQ:UBCP): The dividend payment of US$0.13 per share will be distributed into shareholder on 20 September 2018, and the stock will begin trading ex-dividend at an earlier date, 07 September 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into United Bancorp’s latest financial data to analyse its dividend attributes.

See our latest analysis for United Bancorp

5 checks you should use to assess a dividend stock

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

  • Is it the top 25% annual dividend yield payer?
  • Does it consistently pay out dividends without missing a payment of significantly cutting payout?
  • Has dividend per share amount increased over the past?
  • Does earnings amply cover its dividend payments?
  • Will the company be able to keep paying dividend based on the future earnings growth?
NasdaqCM:UBCP Historical Dividend Yield September 3rd 18

Does United Bancorp pass our checks?

United Bancorp has a trailing twelve-month payout ratio of 60.6%, 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.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Although UBCP’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.

In terms of its peers, United Bancorp has a yield of 4.2%, which is high for Banks stocks.

Next Steps:

Considering the dividend attributes we analyzed above, United Bancorp is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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 fundamental factors you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for UBCP’s future growth? Take a look at our free research report of analyst consensus for UBCP’s outlook.
  2. Valuation: What is UBCP 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 UBCP is currently mispriced by the market.
  3. Other 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.