Equity Bancshares, Inc. (NASDAQ:EQBK) the stock is set to trade ex-dividend in three days. Generally, the ex-dividend date is one business day before the record date which is the date a company determines which shareholders are eligible to receive a dividend. It is important to know the ex-dividend date, because any trade in the stock must have settled on or before the record date. This means that investors who buy Equity Bancshares shares on or after June 29 will not receive the dividend, which will be paid on July 14.
The company’s next dividend payment will be $0.08 per share. Last year, in total, the company distributed US$0.32 to shareholders. Over the past 12 months of distributions, Equity Bancshares has yielded approximately 1.1% on its current price of $29.89. If you’re buying this company for its dividend, you should get an idea of the reliability and sustainability of Equity Bancshares’ dividend. We need to see if the dividend is covered by earnings and if it increases.
Check out our latest analysis for Equity Bancshares
Dividends are usually paid out of company earnings, so if a company pays out more than it has earned, its dividend is usually at risk of being reduced. Equity Bancshares paid out only 7.0% of its profits last year, which we believe is relatively low and leaves plenty of room for unforeseen circumstances.
When a company has paid out less in dividends than it has earned in profits, this generally suggests that its dividend is affordable. The lower the percentage of its profits it pays out, the greater the margin of safety for the dividend if the company goes into a recession.
Click here to see the company’s payout ratio, as well as analysts’ estimates of its future dividends.
Have earnings and dividends increased?
Companies with strong growth prospects are generally the best dividend payers because it is easier to increase dividends when earnings per share improve. If earnings fall and the company is forced to cut its dividend, investors could see the value of their investment go up in smoke. It is encouraging to see that Equity Bancshares has grown its profits rapidly, growing by 25% per year over the past five years.
Given that Equity Bancshares has only been paying a dividend for a year, there isn’t much past history to draw on.
To sum up
Equity Bancshares worth buying for its dividend? Typically, companies that grow rapidly and pay out only a small fraction of profits retain profits to reinvest in the business. This is one of the most attractive investment combinations according to this analysis, as it can create substantial value for long-term investors. In summary, Equity Bancshares looks promising as a dividend-paying stock, and we suggest you take a closer look.
On that note, you will want to research the risks Equity Bancshares faces. For example, we found 2 warning signs for Equity Bancshares which we recommend you consider before investing in the company.
A common investment mistake is to buy the first good stock you see. Here you can find a complete list of high yielding dividend stocks.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.