Glen Burnie Bancorp (NASDAQ:GLBZ) Is Paying Out A Dividend Of $0.10

Glen Burnie Bancorp (NASDAQ:GLBZ) has announced that it will pay a dividend of $0.10 per share on the 6th of May. The dividend yield will be 7.6% based on this payment which is still above the industry average.

See our latest analysis for Glen Burnie Bancorp

Glen Burnie Bancorp's Dividend Forecasted To Be Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much.

Glen Burnie Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Glen Burnie Bancorp's last earnings report, the payout ratio is at a decent 80%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, could fall by 2.6% if the company can't turn things around from the last few years. If recent patterns in the dividend continue, we could see the future payout ratio reaching 83% in the next 12 months which is on the higher end of the range we would say is sustainable.

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Dividend Volatility

The company has a long dividend track record, but it doesn't look great with cuts in the past. The payments haven't really changed that much since 10 years ago. The dividend has seen some fluctuations in the past, so even though the dividend was raised this year, we should remember that it has been cut in the past.

Glen Burnie Bancorp May Find It Hard To Grow The Dividend

With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. It's not great to see that Glen Burnie Bancorp's earnings per share has fallen at approximately 2.6% per year over the past five years. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends.

The Dividend Could Prove To Be Unreliable

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. The payments are bit high to be considered sustainable, and the track record isn't the best. We don't think Glen Burnie Bancorp is a great stock to add to your portfolio if income is your focus.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 2 warning signs for Glen Burnie Bancorp that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield 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.