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Princeton Bancorp, Inc.'s (NASDAQ:BPRN) investors are due to receive a payment of $0.30 per share on 28th of February. This means the dividend yield will be fairly typical at 3.7%.
Check out our latest analysis for Princeton Bancorp
Princeton Bancorp's Dividend Forecasted To Be Well Covered By Earnings
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
Princeton Bancorp has established itself as a dividend paying company, given its 6-year history of distributing earnings to shareholders. Based on Princeton Bancorp's last earnings report, the payout ratio is at a decent 74%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Looking forward, EPS is forecast to rise by 174.2% over the next 3 years. Analysts estimate the future payout ratio will be 32% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
Princeton Bancorp Is Still Building Its Track Record
The dividend's track record has been pretty solid, but with only 6 years of history we want to see a few more years of history before making any solid conclusions. The dividend has gone from an annual total of $0.12 in 2019 to the most recent total annual payment of $1.20. This implies that the company grew its distributions at a yearly rate of about 47% over that duration. Princeton Bancorp has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
Dividend Growth May Be Hard To Achieve
Investors could be attracted to the stock based on the quality of its payment history. Let's not jump to conclusions as things might not be as good as they appear on the surface. Princeton Bancorp hasn't seen much change in its earnings per share over the last five years.
Our Thoughts On Princeton Bancorp's Dividend
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Princeton Bancorp's payments, as there could be some issues with sustaining them into the future. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments Princeton Bancorp has been making. This company is not in the top tier of income providing stocks.
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. Taking the debate a bit further, we've identified 2 warning signs for Princeton Bancorp that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.