It looks like Glen Burnie Bancorp (NASDAQ:GLBZ) is about to go ex-dividend in the next 4 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Therefore, if you purchase Glen Burnie Bancorp's shares on or after the 22nd of July, you won't be eligible to receive the dividend, when it is paid on the 5th of August.

The company's next dividend payment will be US$0.10 per share, and in the last 12 months, the company paid a total of US$0.40 per share. Calculating the last year's worth of payments shows that Glen Burnie Bancorp has a trailing yield of 8.8% on the current share price of US$4.52. If you buy this business for its dividend, you should have an idea of whether Glen Burnie Bancorp's dividend is reliable and sustainable. As a result, readers should always check whether Glen Burnie Bancorp has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Glen Burnie Bancorp

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. Glen Burnie Bancorp paid out 115% of profit in the past year, which we think is typically not sustainable unless there are mitigating characteristics such as unusually strong cash flow or a large cash balance.

Generally, the higher a company's payout ratio, the more the dividend is at risk of being reduced.

Click here to see how much of its profit Glen Burnie Bancorp paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. 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 discomforted by Glen Burnie Bancorp's 9.4% per annum decline in earnings in the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. It looks like the Glen Burnie Bancorp dividends are largely the same as they were 10 years ago. When earnings are declining yet the dividends are flat, typically the company is either paying out a higher portion of its earnings, or paying out of cash or debt on the balance sheet, neither of which is ideal.