Auburn National Bancorporation (NASDAQ:AUBN) Has Announced A Dividend Of $0.27

Auburn National Bancorporation, Inc.'s (NASDAQ:AUBN) investors are due to receive a payment of $0.27 per share on 26th of June. This makes the dividend yield 5.1%, which will augment investor returns quite nicely.

Check out our latest analysis for Auburn National Bancorporation

Auburn National Bancorporation's Earnings Will Easily Cover The Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.

Auburn National Bancorporation has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 37%, which means that Auburn National Bancorporation would be able to pay its last dividend without pressure on the balance sheet.

Over the next year, EPS could expand by 5.5% if recent trends continue. If the dividend continues along recent trends, we estimate the future payout ratio will be 36%, which is in the range that makes us comfortable with the sustainability of the dividend.

Auburn National Bancorporation Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The annual payment during the last 10 years was $0.82 in 2013, and the most recent fiscal year payment was $1.08. This means that it has been growing its distributions at 2.8% 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.

Auburn National Bancorporation Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. Auburn National Bancorporation has impressed us by growing EPS at 5.5% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Auburn National Bancorporation's prospects of growing its dividend payments in the future.

Auburn National Bancorporation 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.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Auburn National Bancorporation that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.