American National Bankshares (NASDAQ:AMNB) Is Due To Pay A Dividend Of US$0.27

The board of American National Bankshares Inc. (NASDAQ:AMNB) has announced that it will pay a dividend of US$0.27 per share on the 18th of June. The dividend yield will be 3.1% based on this payment which is still above the industry average.

View our latest analysis for American National Bankshares

American National Bankshares' Dividend Is Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much. However, American National Bankshares' earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to expand by 2.2%. If the dividend continues along recent trends, we estimate the payout ratio will be 36%, which is in the range that makes us comfortable with the sustainability of the dividend.

American National Bankshares Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2011, the first annual payment was US$0.92, compared to the most recent full-year payment of US$1.08. This means that it has been growing its distributions at 1.6% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. American National Bankshares has impressed us by growing EPS at 11% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for American National Bankshares' prospects of growing its dividend payments in the future.

American National Bankshares Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think American National Bankshares might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for American National Bankshares that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.

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