Updated 3/6/25
Bank of Utica (BKUTK) is a name that flies under the radar, but for income-focused investors, it has some interesting qualities. This small, regional bank has a history of conservative management and trades with minimal daily volume. Priced at $465.00 as of March 5, it’s not a stock that sees a lot of action, but its 4.09% dividend yield and low payout ratio of 24.33% make it worth a closer look for those prioritizing steady income.
While this isn’t a bank making bold expansion moves or landing on the front page of financial news, it operates with a steady hand. That kind of consistency can be appealing for dividend investors who value reliability over speculation. Let’s break down what makes BKUTK stand out and where potential concerns might lie.
Key Dividend Metrics
💰 Dividend Yield: 4.09%
📈 5-Year Average Yield: 4.27%
🔄 Payout Ratio: 24.33% (A comfortable level for sustainability)
📅 Ex-Dividend Date: December 31, 2024
💵 Next Dividend Payment Date: January 21, 2025
📊 Trailing Annual Dividend Yield: 0.00% (Potential irregular payment history)
Dividend Overview
At a glance, Bank of Utica offers an appealing 4.09% dividend yield, comfortably above the market average. A low payout ratio of just 24.33% suggests the company isn’t overextending itself to pay dividends, which bodes well for long-term sustainability.
However, one thing worth noting is that the trailing annual dividend yield is listed at 0.00%. This raises questions about the bank’s payment history. Has there been inconsistency in past distributions? Was there a temporary halt to dividends? These are questions that require further digging for those who prioritize steady income.
Dividend Growth and Safety
For dividend investors, the strength of a stock lies not just in the yield, but in how safe and consistent it is over time.
The low payout ratio gives this dividend plenty of breathing room. Unlike companies that distribute 70% or more of their earnings in dividends, Bank of Utica retains a significant portion of its profits, which can be reinvested or saved for future stability. That makes the dividend less vulnerable to economic downturns.
The major question is whether this dividend will keep growing. Without a clear history of regular increases, it’s difficult to say how much of a priority dividend growth is for management. While the bank isn’t overleveraged, it also isn’t making moves to expand aggressively, so investors looking for rising payouts might want to temper expectations.
Analyst Ratings
📈 Recent Upgrades
Some analysts have upgraded BKUTK, pointing to the bank’s strong financial health and steady dividend payouts. 💰 Its conservative lending approach and solid balance sheet have been key reasons for the positive outlook. The bank’s commitment to maintaining and gradually increasing dividends has also made it appealing to income-focused investors looking for stability in their portfolios.
📉 Recent Downgrades
On the other hand, some analysts have issued downgrades due to concerns about limited growth potential. 🌍 The bank’s focus on a specific geographic region restricts expansion opportunities, which could cap future earnings growth. Additionally, the relatively low trading volume has raised liquidity concerns, making it more difficult for investors to buy or sell shares without affecting the stock price.
🎯 Consensus Price Target
Analysts have mixed views on where BKUTK is headed. Some see modest upside potential, driven by its stability and dependable dividends. Others take a more cautious stance, noting that the lack of liquidity and limited growth prospects could keep the stock range-bound.
Overall, while Bank of Utica continues to attract investors looking for income and stability, growth limitations and trading volume concerns have resulted in a balanced mix of analyst upgrades and downgrades.
Earning Report Summary
Bank of Utica’s latest earnings report painted a mixed picture, showing both strengths and areas that need attention. The bank brought in $3.19 million in revenue for the quarter, which was about 18.87% lower than the same time last year. A drop like that raises some questions about what’s driving the decline and what steps management might take to turn things around.
Even with lower revenue, the bank’s balance sheet remains solid. Bank of Utica has always taken a conservative approach to lending, and that discipline has helped keep it financially stable. But with earnings slipping, the big question is whether the bank will adjust its strategy to find new sources of growth while still playing it safe.
Net income for the quarter came in at $2.25 million, down from the prior year. That decline lines up with the lower revenue numbers and shows the bank is feeling some pressure on profitability. On a per-share basis, earnings were $75.00, which is also a step down from last year. For shareholders, this means returns were a bit lower, reinforcing the need for the bank to find ways to improve performance.
Management acknowledged that the current banking environment is tough. Low interest rates and increased competition are making it harder to generate income the traditional way. Still, they emphasized their focus on staying financially strong while looking for growth opportunities that fit within their conservative model.
One major positive is that the bank’s capital ratios remain well above regulatory requirements. Having a strong capital base gives it some breathing room and allows for flexibility in future decision-making.
Overall, this report shows a bank that is holding steady but facing some headwinds. Revenue and earnings have taken a hit, but financial stability isn’t in question. The next few quarters will be key to seeing if management can find ways to boost income while keeping the bank’s historically cautious approach intact.
Financial Health and Stability
A company’s ability to maintain a dividend long-term comes down to its financial stability. Bank of Utica operates as a small financial institution with a market cap of $117.95 million. Unlike larger banks, it doesn’t have the same exposure to global markets or economic cycles, but that also means limited growth potential.
Looking at valuation, the stock trades with a price-to-earnings ratio of 6.20. That’s a low multiple, which suggests it’s undervalued relative to its earnings. Additionally, the price-to-book ratio of 0.37 is strikingly low—meaning the stock trades well below its book value.
This could signal that the market is overlooking the bank’s intrinsic value, but it could also indicate limited investor interest in such an illiquid stock. Either way, for value investors, it’s an intriguing situation.
Valuation and Stock Performance
Bank of Utica isn’t a stock that moves quickly. The trading volume is incredibly low, with an average of just 61 shares changing hands per day over the past three months. That means buying or selling large positions can be difficult without influencing the price.
Recent stock performance shows a trading range between $366.79 and $518.00 over the past year. The current price of $465.00 sits near its 50-day moving average of $470.08, while the longer-term 200-day moving average is at $431.00. The stock has seen a moderate uptrend over the past year but remains relatively stable, with no major price swings.
Valuation-wise, the stock is cheap by several measures. A P/E ratio of 6.20 and a price-to-book ratio of just 0.37 suggest that the market may not be fully recognizing its value. For patient investors willing to tolerate low liquidity, this could represent an undervalued opportunity.
Risks and Considerations
Every stock comes with risks, and Bank of Utica is no exception. Here are a few factors to keep in mind:
🚩 Low Trading Volume – With only 61 shares trading per day on average, this stock is highly illiquid. That makes it difficult to exit positions quickly without moving the price. Investors who prefer flexibility should be cautious.
🚩 Dividend Stability – While the forward yield looks good, the trailing annual dividend yield is listed as 0.00%. This raises questions about whether dividends have been consistently paid or if there were gaps. Income investors looking for a reliable track record should investigate further.
🚩 Limited Growth – Unlike larger banks that expand through acquisitions or aggressive lending, Bank of Utica maintains a conservative approach. That’s good for stability but limits future growth potential. Investors seeking long-term capital appreciation may want to consider whether this stock aligns with their goals.
🚩 Interest Rate Sensitivity – As a bank, earnings are tied to interest rates. A drop in rates could pressure margins and profitability, potentially impacting future dividend payments.
Final Thoughts
Bank of Utica offers an interesting mix of value and income potential. The 4.09% dividend yield is attractive, and the low payout ratio suggests a high level of sustainability. The stock is also trading at a steep discount relative to its book value, which could indicate an undervalued opportunity.
However, this stock is not for everyone. The low trading volume makes it difficult to enter and exit positions efficiently. More importantly, questions about dividend consistency may be a concern for investors who rely on regular income.
For those willing to hold a highly illiquid stock with a strong yield and room for dividend growth, Bank of Utica could be a unique play. But for those who prioritize liquidity and predictability, further research would be necessary before making any decisions.
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