Macatawa Bank (NASDAQ:MCBC) Has Announced A Dividend Of $0.08
Macatawa Bank Corporation (NASDAQ:MCBC) has announced that it will pay a dividend of $0.08 per share on the 30th of November. This payment means that the dividend yield will be 3.0%, which is around the industry average.
View our latest analysis for Macatawa Bank
Macatawa Bank's Payment Expected To Have Solid Earnings Coverage
While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.
Macatawa Bank has a good history of paying out dividends, with its current track record at 9 years. Past distributions do not necessarily guarantee future ones, but Macatawa Bank's payout ratio of 38% is a good sign for current shareholders as this means that earnings decently cover dividends.
Over the next 3 years, EPS is forecast to expand by 39.2%. The future payout ratio could be 30% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Macatawa Bank Is Still Building Its Track Record
The dividend's track record has been pretty solid, but with only 9 years of history we want to see a few more years of history before making any solid conclusions. Since 2013, the dividend has gone from $0.08 total annually to $0.32. This means that it has been growing its distributions at 17% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
We Could See Macatawa Bank's Dividend Growing
Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Macatawa Bank has been growing its earnings per share at 9.4% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
We Really Like Macatawa Bank's Dividend
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Macatawa Bank that investors need to be conscious of moving forward. Is Macatawa Bank not quite the opportunity you were looking for? Why not check out 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.
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