On the 15 November 2018, Independent Bank Corporation (NASDAQ:IBCP) will be paying shareholders an upcoming dividend amount of US$0.15 per share. However, investors must have bought the company’s stock before 02 November 2018 in order to qualify for the payment. That means you have only 4 days left! Should you diversify into Independent Bank and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
- Is it paying an annual yield above 75% of dividend payers?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- 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 be able to continue to payout at the current rate in the future?
How well does Independent Bank fit our criteria?
The current trailing twelve-month payout ratio for the stock is 41%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect IBCP’s payout to fall to 33% of its earnings, which leads to a dividend yield of around 3.0%. However, EPS should increase to $1.92, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. IBCP has increased its DPS from $0.40 to $0.60 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock.
Relative to peers, Independent Bank has a yield of 2.8%, which is on the low-side for Banks stocks.
Keeping in mind the dividend characteristics above, Independent Bank is definitely worth considering for investors 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. I’ve put together three important aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for IBCP’s future growth? Take a look at our free research report of analyst consensus for IBCP’s outlook.
- Valuation: What is IBCP 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 IBCP is currently mispriced by the market.
- 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 firstname.lastname@example.org.