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Why You Might Be Interested In Bridge Bancorp, Inc. (NASDAQ:BDGE) For Its Upcoming Dividend

Simply Wall St
·3 min read

It looks like Bridge Bancorp, Inc. (NASDAQ:BDGE) is about to go ex-dividend in the next four days. If you purchase the stock on or after the 4th of February, you won't be eligible to receive this dividend, when it is paid on the 12th of February.

Bridge Bancorp's next dividend payment will be US$0.24 per share, and in the last 12 months, the company paid a total of US$0.96 per share. Looking at the last 12 months of distributions, Bridge Bancorp has a trailing yield of approximately 3.9% on its current stock price of $24.43. If you buy this business for its dividend, you should have an idea of whether Bridge Bancorp's dividend is reliable and sustainable. So we need to investigate whether Bridge Bancorp can afford its dividend, and if the dividend could grow.

View our latest analysis for Bridge Bancorp

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see Bridge Bancorp paying out a modest 40% of its earnings.

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

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

historic-dividend
historic-dividend

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Fortunately for readers, Bridge Bancorp's earnings per share have been growing at 11% a year for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Bridge Bancorp's dividend payments are effectively flat on where they were 10 years ago.

To Sum It Up

Is Bridge Bancorp worth buying for its dividend? 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. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Overall, Bridge Bancorp looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

While it's tempting to invest in Bridge Bancorp for the dividends alone, you should always be mindful of the risks involved. Case in point: We've spotted 1 warning sign for Bridge Bancorp you should be aware of.

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.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.