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Have you been keeping an eye on First Mid-Illinois Bancshares Inc’s (NASDAQ:FMBH) upcoming dividend of $0.05 per share payable on the 08 June 2018? Then you only have 8 days left before the stock starts trading ex-dividend on the 31 May 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into First Mid-Illinois Bancshares’s latest financial data to analyse its dividend attributes. Check out our latest analysis for First Mid-Illinois Bancshares
How I analyze a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
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Is their annual yield among the top 25% of dividend payers?
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Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
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Has it increased its dividend per share amount over the past?
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Is its earnings sufficient to payout dividend at the current rate?
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Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How well does First Mid-Illinois Bancshares fit our criteria?
First Mid-Illinois Bancshares has a trailing twelve-month payout ratio of 28.82%, meaning the dividend is sufficiently covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Compared to its peers, First Mid-Illinois Bancshares has a yield of 1.79%, which is on the low-side for Banks stocks.
Next Steps:
If First Mid-Illinois Bancshares is in your portfolio for cash-generating reasons, there may be better alternatives out there. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three relevant factors you should further research:
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Future Outlook: What are well-informed industry analysts predicting for FMBH’s future growth? Take a look at our free research report of analyst consensus for FMBH’s outlook.
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Valuation: What is FMBH worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether FMBH is currently mispriced by the market.
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Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.