It looks like AmeriServ Financial, Inc. (NASDAQ:ASRV) is about to go ex-dividend in the next 4 days. Investors can purchase shares before the 1st of November in order to be eligible for this dividend, which will be paid on the 18th of November.
AmeriServ Financial’s upcoming dividend is US$0.03 a share, following on from the last 12 months, when the company distributed a total of US$0.1 per share to shareholders. Based on the last year’s worth of payments, AmeriServ Financial stock has a trailing yield of around 2.4% on the current share price of $4.19. If you buy this business for its dividend, you should have an idea of whether AmeriServ Financial’s dividend is reliable and sustainable. As a result, readers should always check whether AmeriServ Financial has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for AmeriServ Financial
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. AmeriServ Financial paid out just 22% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
Generally speaking, the lower a company’s payout ratios, the more resilient its dividend usually is.
Click here to see how much of its profit AmeriServ Financial paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we’re encouraged by the steady growth at AmeriServ Financial, with earnings per share up 9.6% on average over the last five years.
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 AmeriServ Financial dividends are largely the same as they were ten years ago.
Final Takeaway
Should investors buy AmeriServ Financial for the upcoming dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. We think this is a pretty attractive combination, and would be interested in investigating AmeriServ Financial more closely.
Keen to explore more data on AmeriServ Financial’s financial performance? Check out our visualisation of its historical revenue and earnings growth.
We wouldn’t recommend just buying the first dividend stock you see, though. Here’s a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
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