Landmark Bancorp, Inc. (NASDAQ:LARK) Looks Like A Good Stock, And It's Going Ex-Dividend Soon
It looks like Landmark Bancorp, Inc. (NASDAQ:LARK) is about to go ex-dividend in the next 4 days. 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. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. This means that investors who purchase Landmark Bancorp's shares on or after the 13th of February will not receive the dividend, which will be paid on the 28th of February.
The company's next dividend payment will be US$0.21 per share. Last year, in total, the company distributed US$0.80 to shareholders. Last year's total dividend payments show that Landmark Bancorp has a trailing yield of 4.4% on the current share price of US$19.12. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Landmark Bancorp has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Landmark Bancorp
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Landmark Bancorp paying out a modest 40% of its earnings.
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 how much of its profit Landmark Bancorp paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Fortunately for readers, Landmark Bancorp's earnings per share have been growing at 20% a year for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Landmark Bancorp has delivered an average of 6.6% per year annual increase in its dividend, based on the past 10 years of dividend payments. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
Final Takeaway
Has Landmark Bancorp got what it takes to maintain its dividend payments? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, Landmark Bancorp appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
Keen to explore more data on Landmark Bancorp's financial performance? Check out our visualisation of its historical revenue and earnings growth.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
