MetroCity Bankshares (NASDAQ:MCBS) Is Paying Out A Dividend Of $0.15
MetroCity Bankshares, Inc. (NASDAQ:MCBS) will pay a dividend of $0.15 on the 10th of November. This means the dividend yield will be fairly typical at 2.7%.
Check out our latest analysis for MetroCity Bankshares
MetroCity Bankshares' Dividend Forecasted To Be Well Covered By Earnings
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.
MetroCity Bankshares has a good history of paying out dividends, with its current track record at 6 years. While past data isn't a guarantee for the future, MetroCity Bankshares' latest earnings report puts its payout ratio at 5.1%, showing that the company can pay out its dividends comfortably.
EPS is set to fall by 8.3% over the next 12 months. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 27%, which would be comfortable for the company to continue in the future.
MetroCity Bankshares Is Still Building Its Track Record
The dividend's track record has been pretty solid, but with only 6 years of history we want to see a few more years of history before making any solid conclusions. Since 2016, the annual payment back then was $0.12, compared to the most recent full-year payment of $0.60. This means that it has been growing its distributions at 31% per annum over that time. MetroCity Bankshares has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that MetroCity Bankshares has grown earnings per share at 15% per year over the past three years. With a decent amount of growth and a low payout ratio, we think this bodes well for MetroCity Bankshares' prospects of growing its dividend payments in the future.
We Really Like MetroCity Bankshares' Dividend
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. To that end, MetroCity Bankshares has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about. Is MetroCity Bankshares 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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