Income Investors Should Know That Nicolet Bankshares, Inc. (NYSE:NIC) Goes Ex-Dividend Soon
Readers hoping to buy Nicolet Bankshares, Inc. (NYSE:NIC) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Therefore, if you purchase Nicolet Bankshares' shares on or after the 7th of March, you won't be eligible to receive the dividend, when it is paid on the 15th of March.
The company's next dividend payment will be US$0.25 per share. Last year, in total, the company distributed US$1.00 to shareholders. Based on the last year's worth of payments, Nicolet Bankshares has a trailing yield of 1.3% on the current stock price of US$78.98. If you buy this business for its dividend, you should have an idea of whether Nicolet Bankshares's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.
Check out our latest analysis for Nicolet Bankshares
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Nicolet Bankshares is paying out just 18% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.
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 the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're not enthused to see that Nicolet Bankshares's earnings per share have remained effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.
Unfortunately Nicolet Bankshares has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.
The Bottom Line
Is Nicolet Bankshares an attractive dividend stock, or better left on the shelf? Nicolet Bankshares's earnings per share have not grown at all in recent years, although we like that it is paying out a low percentage of its earnings. It doesn't appear an outstanding opportunity, but could be worth a closer look.
If you want to look further into Nicolet Bankshares, it's worth knowing the risks this business faces. Every company has risks, and we've spotted 2 warning signs for Nicolet Bankshares you should know about.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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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.
