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MidWestOne Financial Group, Inc. (NASDAQ:MOFG) Passed Our Checks, And It's About To Pay A US$0.22 Dividend

Simply Wall St
·3 mins read

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see MidWestOne Financial Group, Inc. (NASDAQ:MOFG) is about to trade ex-dividend in the next 4 days. You will need to purchase shares before the 28th of February to receive the dividend, which will be paid on the 16th of March.

MidWestOne Financial Group's next dividend payment will be US$0.22 per share, and in the last 12 months, the company paid a total of US$0.88 per share. Based on the last year's worth of payments, MidWestOne Financial Group has a trailing yield of 2.7% on the current stock price of $32.06. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether MidWestOne Financial Group can afford its dividend, and if the dividend could grow.

Check out our latest analysis for MidWestOne Financial Group

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. MidWestOne Financial Group paid out a comfortable 28% of its profit last year.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

NasdaqGS:MOFG Historical Dividend Yield, February 23rd 2020
NasdaqGS:MOFG Historical Dividend Yield, February 23rd 2020

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're encouraged by the steady growth at MidWestOne Financial Group, with earnings per share up 5.9% on average over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past ten years, MidWestOne Financial Group has increased its dividend at approximately 16% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

Final Takeaway

Should investors buy MidWestOne Financial Group for the upcoming dividend? MidWestOne Financial Group has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. Overall, MidWestOne Financial Group looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

Ever wonder what the future holds for MidWestOne Financial Group? See what the four analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.