AmeriServ Financial (NASDAQ:ASRV) Has Re-Affirmed Its Dividend Of US$0.025

By
Simply Wall St
Published
July 23, 2021
NasdaqGM:ASRV
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The board of AmeriServ Financial, Inc. (NASDAQ:ASRV) has announced that it will pay a dividend of US$0.025 per share on the 16th of August. This means the dividend yield will be fairly typical at 2.6%.

Check out our latest analysis for AmeriServ Financial

AmeriServ Financial's Earnings Easily Cover the Distributions

Unless the payments are sustainable, the dividend yield doesn't mean too much. However, AmeriServ Financial's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share could rise by 12.8% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 34% by next year, which is in a pretty sustainable range.

historic-dividend
NasdaqGM:ASRV Historic Dividend July 23rd 2021

AmeriServ Financial Doesn't Have A Long Payment History

It is great to see that AmeriServ Financial has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The dividend has gone from US$0.04 in 2013 to the most recent annual payment of US$0.10. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.

The Dividend Looks Likely To Grow

The company's investors will be pleased to have been receiving dividend income for some time. AmeriServ Financial has seen EPS rising for the last five years, at 13% per annum. AmeriServ Financial definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

AmeriServ Financial Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think AmeriServ Financial 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 2 warning signs for AmeriServ Financial that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high performing dividend stock.

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This article by Simply Wall St is general in nature. 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.
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