Parke Bancorp's (NASDAQ:PKBK) Dividend Will Be $0.18
Parke Bancorp, Inc. (NASDAQ:PKBK) has announced a dividend payment of $0.18 per share on October 17, yielding 3.3%. The company has a strong dividend history, with a payout ratio of 28%, indicating earnings sufficiently cover dividends. Although earnings per share have been flat over the past five years, the dividend has grown at a CAGR of 18% since 2015. Analysts believe the dividend is sustainable, and there is potential for future increases, despite slow earnings growth.
The board of Parke Bancorp, Inc. (NASDAQ:PKBK) has announced that it will pay a dividend on the 17th of October, with investors receiving $0.18 per share. This payment means that the dividend yield will be 3.3%, which is around the industry average.
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Parke Bancorp's Earnings Will Easily Cover The Distributions
While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.
Parke Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Parke Bancorp's payout ratio of 28% is a good sign as this means that earnings decently cover dividends.
Looking forward, earnings per share could rise by 1.3% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the future payout ratio will be 31%, which is in the range that makes us comfortable with the sustainability of the dividend.
View our latest analysis for Parke Bancorp
Parke Bancorp Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the dividend has gone from $0.137 total annually to $0.72. This works out to be a compound annual growth rate (CAGR) of approximately 18% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
Parke Bancorp May Find It Hard To Grow The Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Unfortunately, Parke Bancorp's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. Earnings growth is slow, but on the plus side, the dividend payout ratio is low and dividends could grow faster than earnings, if the company decides to increase its payout ratio.
We Really Like Parke Bancorp's Dividend
Overall, we like to see the dividend staying consistent, and we think Parke Bancorp might even raise payments in the future. 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 of these factors considered, we think this has solid potential as a dividend stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, Parke Bancorp has 2 warning signs (and 1 which shouldn't be ignored) we think you should know about. Is Parke Bancorp not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
