Yahoo News Should You Buy Peoples Bancorp of North Carolina, Inc. (NASDAQ:PEBK) For Its Upcoming Dividend?
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Peoples Bancorp of North Carolina, Inc. (NASDAQ:PEBK) is about to trade ex-dividend in the next 4 days. Investors can purchase shares before the 2nd of September in order to be eligible for this dividend, which will be paid on the 15th of September.
Peoples Bancorp of North Carolina's next dividend payment will be US$0.15 per share, and in the last 12 months, the company paid a total of US$0.75 per share. Last year's total dividend payments show that Peoples Bancorp of North Carolina has a trailing yield of 4.4% on the current share price of $17.06. If you buy this business for its dividend, you should have an idea of whether Peoples Bancorp of North Carolina's dividend is reliable and sustainable. So we need to investigate whether Peoples Bancorp of North Carolina can afford its dividend, and if the dividend could grow.
View our latest analysis for Peoples Bancorp of North Carolina
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Peoples Bancorp of North Carolina paid out a comfortable 30% of its profit last year.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
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. This is why it's a relief to see Peoples Bancorp of North Carolina earnings per share are up 5.2% per annum over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Peoples Bancorp of North Carolina has delivered an average of 11% per year annual increase in its dividend, based on the past 10 years of dividend payments. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
The Bottom Line
Is Peoples Bancorp of North Carolina worth buying for its dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. We think this is a pretty attractive combination, and would be interested in investigating Peoples Bancorp of North Carolina more closely.
So while Peoples Bancorp of North Carolina looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example - Peoples Bancorp of North Carolina 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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