Yahoo Finance MidWestOne Financial Group (NASDAQ:MOFG) Is Paying Out A Dividend Of $0.2425
MidWestOne Financial Group, Inc.'s (NASDAQ:MOFG) investors are due to receive a payment of $0.2425 per share on 17th of June. Based on this payment, the dividend yield on the company's stock will be 4.5%, which is an attractive boost to shareholder returns.
View our latest analysis for MidWestOne Financial Group
MidWestOne Financial Group's Payment Expected To Have Solid Earnings Coverage
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
MidWestOne Financial Group has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on MidWestOne Financial Group's last earnings report, the payout ratio is at a decent 67%, meaning that the company is able to pay out its dividend with a bit of room to spare.
The next year is set to see EPS grow by 36.3%. If the dividend continues along recent trends, we estimate the future payout ratio will be 53%, which is in the range that makes us comfortable with the sustainability of the dividend.
MidWestOne Financial Group Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.50, compared to the most recent full-year payment of $0.97. This implies that the company grew its distributions at a yearly rate of about 6.9% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
Dividend Growth Potential Is Shaky
Investors could be attracted to the stock based on the quality of its payment history. However, initial appearances might be deceiving. MidWestOne Financial Group's earnings per share has shrunk at 10% a year over the past five years. A sharp decline in earnings per share is not great from from a dividend perspective. Even conservative payout ratios can come under pressure if earnings fall far enough. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.
Our Thoughts On MidWestOne Financial Group's Dividend
Overall, we think MidWestOne Financial Group is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The earnings coverage is acceptable for now, but with earnings on the decline we would definitely keep an eye on the payout ratio. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 2 warning signs for MidWestOne Financial Group that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
