Midland States Bancorp (NASDAQ:MSBI) Is Due To Pay A Dividend Of US$0.29
The board of Midland States Bancorp, Inc. (NASDAQ:MSBI) has announced that it will pay a dividend on the 23rd of May, with investors receiving US$0.29 per share. The dividend yield will be 4.4% based on this payment which is still above the industry average.
See our latest analysis for Midland States Bancorp
Midland States Bancorp's Dividend Is Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, prior to this announcement, Midland States Bancorp's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.
Over the next year, EPS is forecast to expand by 2.1%. If the dividend continues on this path, the payout ratio could be 34% by next year, which we think can be pretty sustainable going forward.
Midland States Bancorp Doesn't Have A Long Payment History
Midland States Bancorp's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2016, the dividend has gone from US$0.72 to US$1.16. This works out to be a compound annual growth rate (CAGR) of approximately 8.3% a year over that time. Midland States Bancorp has a nice track record of dividend growth but we would wait until we see a longer track record before getting too confident.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Midland States Bancorp has grown earnings per share at 10% per year over the past five years. Midland States Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like Midland States Bancorp'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. All in all, this checks a lot of the boxes we look for when choosing an income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 2 warning signs for Midland States Bancorp that investors should take into consideration. Is Midland States Bancorp not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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