AmeriServ Financial (NASDAQ:ASRV) Will Pay A Dividend Of $0.03

AmeriServ Financial, Inc.'s (NASDAQ:ASRV) investors are due to receive a payment of $0.03 per share on 22nd of August. This means the dividend yield will be fairly typical at 3.0%.

Check out our latest analysis for AmeriServ Financial

AmeriServ Financial's Payment Expected To Have Solid Earnings Coverage

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

AmeriServ Financial has established itself as a dividend paying company, given its 9-year history of distributing earnings to shareholders. While past data isn't a guarantee for the future, AmeriServ Financial's latest earnings report puts its payout ratio at 23%, showing that the company can pay out its dividends comfortably.

If the trend of the last few years continues, EPS will grow by 11.3% over the next 12 months. Assuming the dividend continues along recent trends, we think the future payout ratio could be 25% by next year, which is in a pretty sustainable range.

AmeriServ Financial Is Still Building Its Track Record

AmeriServ Financial's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2013, the annual payment back then was $0.04, compared to the most recent full-year payment of $0.12. This means that it has been growing its distributions at 13% per annum 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. It's encouraging to see that AmeriServ Financial has been growing its earnings per share at 11% a 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.

AmeriServ Financial Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend 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 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.