Auburn National Bancorporation (NASDAQ:AUBN) Is Due To Pay A Dividend Of $0.27

Auburn National Bancorporation, Inc. (NASDAQ:AUBN) will pay a dividend of $0.27 on the 25th of September. This makes the dividend yield 4.9%, which will augment investor returns quite nicely.

See our latest analysis for Auburn National Bancorporation

Auburn National Bancorporation's Dividend Forecasted To Be Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much.

Auburn National Bancorporation has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Auburn National Bancorporation's payout ratio of 36% is a good sign as this means that earnings decently cover dividends.

If the trend of the last few years continues, EPS will grow by 5.1% over the next 12 months. If the dividend continues along recent trends, we estimate the future payout ratio will be 35%, 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 a sustained record of paying dividends with very little fluctuation. Since 2013, the annual payment back then was $0.82, compared to the most recent full-year payment of $1.08. This means that it has been growing its distributions at 2.8% per annum over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

The Dividend Has Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Auburn National Bancorporation has seen EPS rising for the last five years, at 5.1% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

We Really Like Auburn National Bancorporation's Dividend

Overall, we like to see the dividend staying consistent, and we think Auburn National Bancorporation might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Auburn National Bancorporation 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.