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Bank of Marin Bancorp (NASDAQ:BMRC) stock is about to trade ex-dividend in 3 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. In other words, investors can purchase Bank of Marin Bancorp's shares before the 7th of November in order to be eligible for the dividend, which will be paid on the 14th of November.
The company's next dividend payment will be US$0.25 per share. Last year, in total, the company distributed US$1.00 to shareholders. Last year's total dividend payments show that Bank of Marin Bancorp has a trailing yield of 4.5% on the current share price of US$22.14. If you buy this business for its dividend, you should have an idea of whether Bank of Marin Bancorp's dividend is reliable and sustainable. So we need to investigate whether Bank of Marin Bancorp can afford its dividend, and if the dividend could grow.
See our latest analysis for Bank of Marin Bancorp
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Bank of Marin Bancorp lost money last year, so the fact that it's paying a dividend is certainly disconcerting. There might be a good reason for this, but we'd want to look into it further before getting comfortable.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Bank of Marin Bancorp reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, Bank of Marin Bancorp has lifted its dividend by approximately 10% a year on average.
Remember, you can always get a snapshot of Bank of Marin Bancorp's financial health, by checking our visualisation of its financial health, here.
Final Takeaway
From a dividend perspective, should investors buy or avoid Bank of Marin Bancorp? It's definitely not great to see that it paid a dividend despite reporting a loss last year. Worse, the general trend in its earnings looks negative in recent times. Bank of Marin Bancorp doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend.