Yahoo Finance There's A Lot To Like About Eagle Bancorp's (NASDAQ:EGBN) Upcoming US$0.22 Dividend
Readers hoping to buy Eagle Bancorp, Inc. (NASDAQ:EGBN) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. You will need to purchase shares before the 14th of October to receive the dividend, which will be paid on the 2nd of November.
Eagle Bancorp's next dividend payment will be US$0.22 per share, on the back of last year when the company paid a total of US$0.88 to shareholders. Based on the last year's worth of payments, Eagle Bancorp has a trailing yield of 2.9% on the current stock price of $30.03. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Eagle Bancorp has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Eagle Bancorp
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Eagle Bancorp has a low and conservative payout ratio of just 24% of its income after tax.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, Eagle Bancorp's earnings per share have been growing at 13% a year for the past five years.
Unfortunately Eagle Bancorp has only been paying a dividend for a year or so, so there's not much of a history to draw insight from.
The Bottom Line
Is Eagle Bancorp an attractive dividend stock, or better left on the shelf? Companies like Eagle Bancorp that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. In summary, Eagle Bancorp appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
While it's tempting to invest in Eagle Bancorp for the dividends alone, you should always be mindful of the risks involved. For example - Eagle Bancorp has 1 warning sign we think you should be aware of.
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising 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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