Isabella Bank Corp (ISBA): A Closer Look at Its Dividend Performance and Sustainability
An Examination of Isabella Bank Corp's Dividend History, Yield, Growth, and Prospects for Future Payouts
Isabella Bank Corp (ISBA) recently announced a dividend of $0.28 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-26. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Isabella Bank Corp's dividend performance and assess its sustainability.
What Does Isabella Bank Corp Do?
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Isabella Bank Corp is a US-based financial service holding company. It offers banking services to businesses, institutions, and individuals. Its lending activities include loans made according to commercial and agricultural operating and real estate purposes, residential real estate loans, and consumer loans. Deposit services offered include checking accounts, savings accounts, certificates of deposit, direct deposits, cash management services, mobile and internet banking, electronic bill pay services, and automated teller machines. The company also offers full-service trust and brokerage services.
A Glimpse at Isabella Bank Corp's Dividend History
Isabella Bank Corp has maintained a consistent dividend payment record since 2007. Dividends are currently distributed on a quarterly basis. Isabella Bank Corp has increased its dividend each year since 2007. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 16 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Isabella Bank Corp's Dividend Yield and Growth
As of today, Isabella Bank Corp currently has a 12-month trailing dividend yield of 5.35% and a 12-month forward dividend yield of 5.39%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Isabella Bank Corp's annual dividend growth rate was 1.30%. Extended to a five-year horizon, this rate increased to 1.40% per year. And over the past decade, Isabella Bank Corp's annual dividends per share growth rate stands at 3.20%.
Based on Isabella Bank Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Isabella Bank Corp stock as of today is approximately 5.74%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Isabella Bank Corp's dividend payout ratio is 0.38.
Isabella Bank Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Isabella Bank Corp's profitability 5 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Isabella Bank Corp's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Isabella Bank Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Isabella Bank Corp's revenue has increased by approximately 8.80% per year on average, a rate that outperforms than approximately 62.77% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Isabella Bank Corp's earnings increased by approximately 21.80% per year on average, a rate that outperforms than approximately 76.74% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 11.10%, which outperforms than approximately 58.69% of global competitors.
Next Steps
Isabella Bank Corp's consistent dividend payments, impressive growth rate, and a payout ratio that suggests a balance between dividend distribution and earnings retention, all point towards a sustainable dividend model. Coupled with its fair profitability and growth metrics, Isabella Bank Corp appears to be a promising candidate for dividend-focused investors. However, as with all investment decisions, it is crucial to conduct thorough research and consider the overall financial health of the company before making an investment decision.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
