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Princeton Bancorp, Inc. (NASDAQ:BPRN) is about to trade ex-dividend in the next four days. The ex-dividend date is usually set to be one business day before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Therefore, if you purchase Princeton Bancorp's shares on or after the 6th of May, you won't be eligible to receive the dividend, when it is paid on the 29th of May.
The company's next dividend payment will be US$0.30 per share. Last year, in total, the company distributed US$1.20 to shareholders. Looking at the last 12 months of distributions, Princeton Bancorp has a trailing yield of approximately 3.9% on its current stock price of US$30.48. If you buy this business for its dividend, you should have an idea of whether Princeton Bancorp's dividend is reliable and sustainable. As a result, readers should always check whether Princeton Bancorp has been able to grow its dividends, or if the dividend might be cut.
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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Princeton Bancorp paid out more than half (71%) of its earnings last year, which is a regular payout ratio for most companies.
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.
Check out our latest analysis for Princeton Bancorp
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. It's not encouraging to see that Princeton Bancorp's earnings are effectively flat over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.