Explore First Mid Bancshares’s Fair Values from the Community and select yours
It looks like First Mid Bancshares, Inc. (NASDAQ:FMBH) is about to go ex-dividend in the next 4 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company’s books to be eligible for a dividend payment. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least one business day to settle. Accordingly, First Mid Bancshares investors that purchase the stock on or after the 15th of August will not receive the dividend, which will be paid on the 29th of August.
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. Looking at the last 12 months of distributions, First Mid Bancshares has a trailing yield of approximately 2.7% on its current stock price of US$37.28. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether First Mid Bancshares can afford its dividend, and if the dividend could grow.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. First Mid Bancshares paid out a comfortable 27% of its profit last year.
Generally speaking, the lower a company’s payout ratios, the more resilient its dividend usually is.
Check out our latest analysis for First Mid Bancshares
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we’re encouraged by the steady growth at First Mid Bancshares, with earnings per share up 4.1% on average over the last five years.
The main way most investors will assess a company’s dividend prospects is by checking the historical rate of dividend growth. First Mid Bancshares has delivered 5.6% dividend growth per year on average over the past 10 years. It’s encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
