MVB Financial Corp. (NASDAQ:MVBF) Looks Like A Good Stock, And It's Going Ex-Dividend Soon
It looks like MVB Financial Corp. (NASDAQ:MVBF) is about to go ex-dividend in the next 2 days. You will need to purchase shares before the 27th of February to receive the dividend, which will be paid on the 15th of March.
MVB Financial's next dividend payment will be US$0.09 per share, and in the last 12 months, the company paid a total of US$0.28 per share. Based on the last year's worth of payments, MVB Financial has a trailing yield of 1.8% on the current stock price of $19.59. 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 MVB Financial has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for MVB Financial
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. MVB Financial has a low and conservative payout ratio of just 8.8% of its income after tax. MVB Financial paid a dividend despite reporting negative free cash flow last year. That's typically a bad combination and - if this were more than a one-off - not sustainable.
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.
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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's comforting to see MVB Financial's earnings have been skyrocketing, up 50% per annum for the past five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, ten years ago, MVB Financial has lifted its dividend by approximately 23% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
The Bottom Line
From a dividend perspective, should investors buy or avoid MVB Financial? Companies like MVB Financial that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, MVB Financial appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
Ever wonder what the future holds for MVB Financial? See what the three analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
