Yahoo Finance Should You Buy Blue Ridge Bankshares, Inc. (NYSEMKT:BRBS) For Its Upcoming Dividend?
Blue Ridge Bankshares, Inc. (NYSEMKT:BRBS) is about to trade ex-dividend in the next 4 days. You can purchase shares before the 21st of October in order to receive the dividend, which the company will pay on the 30th of October.
Blue Ridge Bankshares's next dividend payment will be US$0.14 per share, on the back of last year when the company paid a total of US$0.57 to shareholders. Looking at the last 12 months of distributions, Blue Ridge Bankshares has a trailing yield of approximately 4.1% on its current stock price of $13.89. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.
Check out our latest analysis for Blue Ridge Bankshares
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Blue Ridge Bankshares's payout ratio is modest, at just 33% of profit. Blue Ridge Bankshares paid a dividend despite reporting negative free cash flow last year. That's typically a bad combination and - if this were more than a one-off - not sustainable.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see how much of its profit Blue Ridge Bankshares paid out over the last 12 months.
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. This is why it's a relief to see Blue Ridge Bankshares earnings per share are up 4.3% per annum over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Blue Ridge Bankshares has lifted its dividend by approximately 13% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
To Sum It Up
Is Blue Ridge Bankshares worth buying for its dividend? Blue Ridge Bankshares has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. In summary, Blue Ridge Bankshares appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
On that note, you'll want to research what risks Blue Ridge Bankshares is facing. To help with this, we've discovered 3 warning signs for Blue Ridge Bankshares (1 doesn't sit too well with us!) that you ought to be aware of before buying the shares.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting 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.
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