Peoples Bancorp of North Carolina (NASDAQ:PEBK) Is Paying Out A Larger Dividend Than Last Year
Peoples Bancorp of North Carolina, Inc.'s (NASDAQ:PEBK) dividend will be increasing from last year's payment of the same period to $0.19 on 15th of March. Despite this raise, the dividend yield of 2.2% is only a modest boost to shareholder returns.
Check out our latest analysis for Peoples Bancorp of North Carolina
Peoples Bancorp of North Carolina's Dividend Forecasted To Be Well Covered By Earnings
While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.
Peoples Bancorp of North Carolina has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 24% also shows that Peoples Bancorp of North Carolina is able to comfortably pay dividends.
If the trend of the last few years continues, EPS will grow by 10.8% over the next 12 months. If the dividend continues on this path, the future payout ratio could be 31% by next year, which we think can be pretty sustainable going forward.
Dividend Volatility
The company's dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2013, the annual payment back then was $0.0727, compared to the most recent full-year payment of $0.72. This implies that the company grew its distributions at a yearly rate of about 26% over that duration. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious.
The Dividend Looks Likely To Grow
Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Peoples Bancorp of North Carolina has seen EPS rising for the last five years, at 11% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
Peoples Bancorp of North Carolina Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income 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. For example, we've picked out 2 warning signs for Peoples Bancorp of North Carolina that investors should know about before committing capital to this stock. 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.
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