Equity Bancshares, Inc. (NYSE:EQBK) stock is about to trade ex-dividend in 3 days. The ex-dividend date occurs one day before the record date which is the day on which shareholders need to be on the company’s books in order to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn’t show on the record date. Thus, you can purchase Equity Bancshares’ shares before the 31st of December in order to receive the dividend, which the company will pay on the 15th of January.

The company’s next dividend payment will be US$0.15 per share, and in the last 12 months, the company paid a total of US$0.60 per share. Looking at the last 12 months of distributions, Equity Bancshares has a trailing yield of approximately 1.4% on its current stock price of US$42.87. 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 Equity Bancshares can afford its dividend, and if the dividend could grow.

View our latest analysis for Equity Bancshares

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Equity Bancshares’s payout ratio is modest, at just 45% of profit.

Generally speaking, the lower a company’s payout ratios, the more resilient its dividend usually is.

Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. Equity Bancshares’s earnings per share have fallen at approximately 16% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. Equity Bancshares has delivered an average of 23% per year annual increase in its dividend, based on the past three years of dividend payments.

Final Takeaway

Is Equity Bancshares an attractive dividend stock, or better left on the shelf? Equity Bancshares’s earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we’re on the fence about its dividend prospects.

With that being said, if dividends aren’t your biggest concern with Equity Bancshares, you should know about the other risks facing this business. For example – Equity Bancshares has 2 warning signs we think you should be aware of.

Generally, we wouldn’t recommend just buying the first dividend stock you see. Here’s a curated list of interesting stocks that are 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.