Landmark Bancorp's (NASDAQ:LARK) Shareholders Will Receive A Bigger Dividend Than Last Year

Landmark Bancorp, Inc. (NASDAQ:LARK) will increase its dividend on the 25th of May to US$0.21. This makes the dividend yield about the same as the industry average at 3.2%.

See our latest analysis for Landmark Bancorp

Landmark Bancorp's Payment Has Solid Earnings Coverage

Solid dividend yields are great, but they only really help us if the payment is sustainable. However, Landmark Bancorp's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS could expand by 12.0% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 24% by next year, which is in a pretty sustainable range.

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Landmark Bancorp Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2012, the first annual payment was US$0.44, compared to the most recent full-year payment of US$0.84. This works out to be a compound annual growth rate (CAGR) of approximately 6.6% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Landmark Bancorp has impressed us by growing EPS at 12% per year over the past five years. Landmark Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Landmark Bancorp Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Landmark Bancorp that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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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.