Investors who want to cash in on Midland States Bancorp Inc’s (NASDAQ:MSBI) upcoming dividend of $0.22 per share have only 3 days left to buy the shares before its ex-dividend date, 15 February 2018, in time for dividends payable on the 23 February 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Midland States Bancorp’s most recent financial data to examine its dividend characteristics in more detail. View our latest analysis for Midland States Bancorp
5 checks you should do on a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is their annual yield among the top 25% of dividend payers?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has dividend per share amount increased 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?
Does Midland States Bancorp pass our checks?
Midland States Bancorp has a trailing twelve-month payout ratio of 51.65%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 28.83%, leading to a dividend yield of 2.82%. However, EPS should increase to $2.31, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. The reality is that it is too early to consider Midland States Bancorp as a dividend investment. It has only been consistently paying dividends for 2 years, however, standard practice for reliable payers is to look for a 10-year minimum track record. Relative to peers, Midland States Bancorp has a yield of 2.89%, which is on the low-side for Banks stocks.
If you are building an income portfolio, then Midland States Bancorp is a complicated choice since it has some positive aspects as well as negative ones. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. 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. There are three relevant aspects you should further examine:
- 1. Future Outlook: What are well-informed industry analysts predicting for MSBI’s future growth? Take a look at our free research report of analyst consensus for MSBI’s outlook.
- 2. Valuation: What is MSBI 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 MSBI is currently mispriced by the market.
- 3. 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 pass 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.