Important news for shareholders and potential investors in MidWestOne Financial Group Inc (NASDAQ:MOFG): The dividend payment of $0.17 per share will be distributed into shareholder on 15 December 2017, and the stock will begin trading ex-dividend at an earlier date, 30 November 2017. Is this future income a persuasive enough catalyst for investors to think about MOFG as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. Check out our latest analysis for MidWestOne Financial Group
5 checks you should use to assess a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has dividend per share amount increased over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does MidWestOne Financial Group fit our criteria?
MidWestOne Financial Group has a payout ratio of 32.35%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect MOFG’s payout to fall to 26.98% of its earnings, which leads to a dividend yield of 1.98%. However, EPS should increase to $2.51, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Relative to peers, MOFG has a yield of 1.90%, which is on the low-side for banks stocks.
What this means for you:
Are you a shareholder? If MOFG is in your portfolio for cash-generating reasons, there may be better alternatives out there. It may be worth exploring other dividend stocks as alternatives to MOFG or even look at high-growth stocks to supplement your steady income stocks. I encourage you to continue your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? Taking all the above into account, MidWestOne Financial Group is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. But if you are not exclusively a dividend investor, MOFG could still be an interesting investment opportunity. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Dig deeping in our latest free fundmental analysis to explore other aspects of MOFG.
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.