Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. MidWestOne Financial Group Inc (NASDAQ:MOFG) has returned to shareholders over the past 10 years, an average dividend yield of 2.00% annually. Does MidWestOne Financial Group tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis. See our latest analysis for MidWestOne Financial Group
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has dividend per share amount increased over the past?
- Can it afford to pay the current rate of dividends from its earnings?
- Will it have the ability to keep paying its dividends going forward?
Does MidWestOne Financial Group pass our checks?
The current trailing twelve-month payout ratio for the stock is 32.35%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect MOFG’s payout to fall to 25.37% of its earnings, which leads to a dividend yield of 2.11%. However, EPS should increase to $2.57, 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. 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. Compared to its peers, MidWestOne Financial Group produces a yield of 2.26%, which is on the low-side for Banks stocks.
With this in mind, I definitely rank MidWestOne Financial Group as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. 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. I’ve put together three relevant aspects you should look at:
- 1. Future Outlook: What are well-informed industry analysts predicting for MOFG’s future growth? Take a look at our free research report of analyst consensus for MOFG’s outlook.
- 2. Valuation: What is MOFG 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 MOFG is currently mispriced by the market.
- 3. Other 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.