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

Auburn National Bancorporation, Inc. (NASDAQ:AUBN) will pay a dividend of $0.27 on the 26th of June. This means the annual payment is 4.9% of the current stock price, which is above the average for the industry.

Check out our latest analysis for Auburn National Bancorporation

Auburn National Bancorporation's Payment Expected To Have Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

Having distributed dividends for at least 10 years, Auburn National Bancorporation has a long history of paying out a part of its earnings to shareholders. Based on Auburn National Bancorporation's last earnings report, the payout ratio is at a decent 37%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next year, EPS could expand by 5.5% if recent trends continue. Assuming the dividend continues along recent trends, we think the future payout ratio could be 36% by next year, which is in a pretty sustainable range.

Auburn National Bancorporation Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $0.82 in 2013 to the most recent total annual payment of $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.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Auburn National Bancorporation has grown earnings per share at 5.5% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

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. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. 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. 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 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.