Parke Bancorp (NASDAQ:PKBK) Has Affirmed Its Dividend Of $0.18

The board of Parke Bancorp, Inc. (NASDAQ:PKBK) has announced that it will pay a dividend on the 16th of January, with investors receiving $0.18 per share. This means that the annual payment will be 2.9% of the current stock price, which is in line with the average for the industry.

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Parke Bancorp's Dividend Forecasted To Be Well Covered By Earnings

Unless the payments are sustainable, the dividend yield doesn't mean too much.

Parke Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Parke Bancorp's last earnings report, the payout ratio is at a decent 25%, meaning that the company is able to pay out its dividend with a bit of room to spare.

If the trend of the last few years continues, EPS will grow by 4.6% over the next 12 months. If the dividend continues along recent trends, we estimate the future payout ratio will be 26%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for Parke Bancorp

Parke Bancorp Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2015, the dividend has gone from $0.137 total annually to $0.72. This means that it has been growing its distributions at 18% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

Parke Bancorp May Find It Hard To Grow The Dividend

Investors could be attracted to the stock based on the quality of its payment history. Earnings has been rising at 4.6% per annum over the last five years, which admittedly is a bit slow. While EPS growth is quite low, Parke Bancorp has the option to increase the payout ratio to return more cash to shareholders.

We Really Like Parke Bancorp's Dividend

Overall, we like to see the dividend staying consistent, and we think Parke Bancorp might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

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. As an example, we've identified 1 warning sign for Parke Bancorp that you should be aware of before investing. Is Parke Bancorp not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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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.