ACNB's (NASDAQ:ACNB) Shareholders Will Receive A Bigger Dividend Than Last Year

ACNB Corporation's (NASDAQ:ACNB) dividend will be increasing from last year's payment of the same period to $0.30 on 15th of December. This takes the annual payment to 3.1% of the current stock price, which is about average for the industry.

View our latest analysis for ACNB

ACNB's Dividend Forecasted To Be Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Having distributed dividends for at least 10 years, ACNB has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 25%, which means that ACNB would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, earnings per share is forecast to fall by 16.5% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 30% over the same time period, which is in a pretty comfortable range.

ACNB Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.76 in 2013 to the most recent total annual payment of $1.20. This means that it has been growing its distributions at 4.7% per annum over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. ACNB has impressed us by growing EPS at 10% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

We Really Like ACNB's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for ACNB that investors need to be conscious of moving forward. 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.