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Readers hoping to buy Richmond Mutual Bancorporation, Inc. (NASDAQ:RMBI) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. This means that investors who purchase shares on or after the 2nd of December will not receive the dividend, which will be paid on the 17th of December.
Richmond Mutual Bancorporation's next dividend payment will be US$0.05 per share, on the back of last year when the company paid a total of US$0.20 to shareholders. Based on the last year's worth of payments, Richmond Mutual Bancorporation has a trailing yield of 1.5% on the current stock price of $13.25. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Richmond Mutual Bancorporation can afford its dividend, and if the dividend could grow.
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. Richmond Mutual Bancorporation reported a loss last year, so it's not great to see that it has continued paying a dividend.
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. If earnings fall far enough, the company could be forced to cut its dividend. Richmond Mutual Bancorporation was unprofitable last year, and sadly its loss per share worsened by 2,759% on the previous year.
Unfortunately Richmond Mutual Bancorporation has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.
We update our analysis on Richmond Mutual Bancorporation every 24 hours, so you can always get the latest insights on its financial health, here.
Is Richmond Mutual Bancorporation worth buying for its dividend? It's hard to get past the idea of Richmond Mutual Bancorporation paying a dividend despite reporting a loss over the past year - especially when the general trend in its earnings also looks to be negative. Richmond Mutual Bancorporation doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend.
With that in mind though, if the poor dividend characteristics of Richmond Mutual Bancorporation don't faze you, it's worth being mindful of the risks involved with this business. In terms of investment risks, we've identified 1 warning sign with Richmond Mutual Bancorporation and understanding them should be part of your investment process.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. 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.
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