If you are interested in cashing in on TowneBank’s (NASDAQ:TOWN) upcoming dividend of $0.14 per share, you only have 7 days left to buy the shares before its ex-dividend date, 28 December 2017, in time for dividends payable on the 12 January 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding TowneBank can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. See our latest analysis for TowneBank
5 checks you should do on a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is its annual yield among the top 25% of dividend-paying companies?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has it increased its dividend per share amount over the past?
- Is is able to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does TowneBank fit our criteria?
TowneBank has a payout ratio of 35.56%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 32.92%, leading to a dividend yield of 1.86%. In addition to this, EPS should increase to $1.76. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. TOWN has increased its DPS from $0.31 to $0.56 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. In terms of its peers, TowneBank produces a yield of 1.71%, which is on the low-side for banks stocks.
What this means for you:
Are you a shareholder? Investors of TowneBank can continue to expect strong dividends from the stock moving forward. With its favorable dividend characteristics, TowneBank is one worth keeping around in your income portfolio. But, depending on your portfolio composition, it may be worth exploring other dividend stocks to enhance your diversification, or even look at high-growth stocks to complement your steady income stocks. I encourage you to continue your research by exploring my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.
Are you a potential investor? With these dividend metrics in mind, I definitely rank TowneBank as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. I also recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. No matter how much of a cash cow TowneBank is, it is not worth an infinite price. Is TowneBank overvalued or is it actually a bargain? Take a look at our latest free analysis to find out!
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.