Our analysis is based on comparing Middleburg Financial Corp. with the following peers – Union Bankshares Corporation, Cardinal Financial Corporation, National Bankshares, Inc., Old Point Financial Corporation, Southern National Bancorp of Virginia, Inc., American National Bankshares Inc., Village Bank and Trust Financial Corp., Xenith Bankshares, Inc., Bank of the James Financial Group, Inc. and Access National Corporation (UBSH-US, CFNL-US, NKSH-US, OPOF-US, SONA-US, AMNB-US, VBFC-US, XBKS-US, BOTJ-US and ANCX-US).
Middleburg Financial Corp.’s dividend yield is 1.46 percent and its dividend payout is 47.71 percent. This compares to a peer average dividend yield of 1.77 percent and a payout level of 37.65 percent. This combination of a relatively lower dividend yield and a higher payout ratio suggest that the dividend payout might not be sustainable. Supporting this is the company’s average dividend quality score of 50 out of a possible score of 100, which points to some weakness in being able to sustain the higher payout ratio.
Dividend Quality Overview
- Over the last twelve months (prior to September 30, 2016), MBRG-US paid a medium quality dividend, which represents a yield of 1.46% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 1 was high quality, 1 was medium quality and 3 were low quality.
- The ending cash balance, with a dividend coverage of 1.50x, provides a moderate cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to September 30, 2016), MBRG-US paid a medium quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 4.02x), investing cash flow (coverage of -17.00x), issuance cash flow (coverage of 18.31x) and twelve-month prior cash (coverage of 1.76x), for a total dividend coverage of 2.50x.
MBRG-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -0.56x). Thus, the total coverage including share buybacks is 3.07x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s net cash inflow from issuance was required (in addition to operating and investment cash) to pay the dividend, which suggests a medium dividend quality.
|Dividend Yield (%)||1.4||1.13||1.33||1.88||2.51||1.46|
|Dividend Payout (%)||28.17||21.74||29.89||32.08||42.2||47.71|
A complete list of metrics and analysis is available on the company page.
Middleburg Financial Corp. operates as a bank holding company, which engages in the provision of banking and financial services. It operates through the following segments: Commercial and Retail Banking Services; Wealth Management Services; and Mortgage Banking Services. Its products include savings and checking accounts, cash management, non-profit banking, financial planning, portfolio development and management, credit cards, consumer and equity loans, safe deposit boxes, mutual funds investments, online and mobile banking, and company retirement plans. The company was founded in 1993 and is headquartered in Middleburg, VA.
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