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Parke Bancorp, Inc. (NASDAQ:PKBK) Looks Interesting, And It's About To Pay A Dividend

Simply Wall St

Parke Bancorp, Inc. (NASDAQ:PKBK) stock is about to trade ex-dividend in 3 days time. You will need to purchase shares before the 8th of April to receive the dividend, which will be paid on the 24th of April.

Parke Bancorp's next dividend payment will be US$0.16 per share. Last year, in total, the company distributed US$0.58 to shareholders. Last year's total dividend payments show that Parke Bancorp has a trailing yield of 5.8% on the current share price of $10.09. If you buy this business for its dividend, you should have an idea of whether Parke Bancorp's dividend is reliable and sustainable. As a result, readers should always check whether Parke Bancorp has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Parke Bancorp

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Parke Bancorp paid out just 22% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.

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

Click here to see how much of its profit Parke Bancorp paid out over the last 12 months.

NasdaqCM:PKBK Historical Dividend Yield April 4th 2020
NasdaqCM:PKBK Historical Dividend Yield April 4th 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. If earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see Parke Bancorp's earnings per share have risen 19% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, six years ago, Parke Bancorp has lifted its dividend by approximately 27% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

The Bottom Line

From a dividend perspective, should investors buy or avoid Parke Bancorp? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. Parke Bancorp ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

In light of that, while Parke Bancorp has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 4 warning signs for Parke Bancorp that you should be aware of before investing in their shares.

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.