Yahoo Finance PCB Bancorp (NASDAQ:PCB) Is Paying Out A Dividend Of $0.18
The board of PCB Bancorp (NASDAQ:PCB) has announced that it will pay a dividend of $0.18 per share on the 17th of May. This means the annual payment is 4.7% of the current stock price, which is above the average for the industry.
Check out our latest analysis for PCB Bancorp
PCB Bancorp's Earnings Will Easily Cover The Distributions
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
Having paid out dividends for 9 years, PCB Bancorp has a good history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but PCB Bancorp's payout ratio of 41% is a good sign for current shareholders as this means that earnings decently cover dividends.
The next year is set to see EPS grow by 2.0%. If the dividend continues along recent trends, we estimate the future payout ratio will be 51%, which is in the range that makes us comfortable with the sustainability of the dividend.
PCB Bancorp Is Still Building Its Track Record
It is great to see that PCB Bancorp has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The dividend has gone from an annual total of $0.109 in 2015 to the most recent total annual payment of $0.72. This implies that the company grew its distributions at a yearly rate of about 23% over that duration. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
Dividend Growth May Be Hard To Achieve
The company's investors will be pleased to have been receiving dividend income for some time. However, PCB Bancorp's EPS was effectively flat over the past five years, which could stop the company from paying more every year. The company has been growing at a pretty soft 1.5% per annum, and is paying out quite a lot of its earnings to shareholders. This could mean the dividend doesn't have the growth potential we look for going into the future.
Our Thoughts On PCB Bancorp's Dividend
Overall, we think PCB Bancorp is a solid choice as a dividend stock, even though the dividend wasn't raised this year. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.
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. For instance, we've picked out 1 warning sign for PCB Bancorp that investors should take into consideration. 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.
