MidWestOne Financial Group (NASDAQ:MOFG) Has Affirmed Its Dividend Of $0.2425
The board of MidWestOne Financial Group, Inc. (NASDAQ:MOFG) has announced that it will pay a dividend of $0.2425 per share on the 15th of December. This makes the dividend yield 4.5%, which will augment investor returns quite nicely.
Check out our latest analysis for MidWestOne Financial Group
MidWestOne Financial Group's Earnings Will Easily Cover The Distributions
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.
MidWestOne Financial Group has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but MidWestOne Financial Group's payout ratio of 44% is a good sign as this means that earnings decently cover dividends.
Over the next 3 years, EPS is forecast to expand by 70.7%. Analysts forecast the future payout ratio could be 36% over the same time horizon, which is a number we think the company can maintain.
MidWestOne Financial Group Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.50 in 2013 to the most recent total annual payment of $0.97. This implies that the company grew its distributions at a yearly rate of about 6.9% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
MidWestOne Financial Group May Find It Hard To Grow The Dividend
Investors could be attracted to the stock based on the quality of its payment history. Earnings have grown at around 4.7% a year for the past five years, which isn't massive but still better than seeing them shrink. MidWestOne Financial Group is struggling to find viable investments, so it is returning more to shareholders. This isn't bad in itself, but unless earnings growth pick up we wouldn't expect dividends to grow either.
MidWestOne Financial Group Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think MidWestOne Financial Group might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for MidWestOne Financial Group that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
