Yahoo Finance MidWestOne Financial Group's (NASDAQ:MOFG) Dividend Will Be Increased To US$0.24
MidWestOne Financial Group, Inc. (NASDAQ:MOFG) has announced that it will be increasing its dividend on the 15th of June to US$0.24. Based on the announced payment, the dividend yield for the company will be 3.1%, which is fairly typical for the industry.
Check out our latest analysis for MidWestOne Financial Group
MidWestOne Financial Group's Earnings Easily Cover the Distributions
We aren't too impressed by dividend yields unless they can be sustained over time. However, MidWestOne Financial Group's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
Looking forward, earnings per share is forecast to fall by 5.1% over the next year. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 27%, which is comfortable for the company to continue in the future.
MidWestOne Financial Group Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from US$0.24 in 2012 to the most recent annual payment of US$0.95. This means that it has been growing its distributions at 15% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see MidWestOne Financial Group has been growing its earnings per share at 16% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
MidWestOne Financial Group Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that MidWestOne Financial Group is a strong income stock thanks to its track record and growing earnings. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 5 MidWestOne Financial Group analysts we track are forecasting continued growth with our free report on analyst estimates for the company. 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.
