Is It Worth Considering Auburn National Bancorporation, Inc. (NASDAQ:AUBN) For Its Upcoming Dividend?

It looks like Auburn National Bancorporation, Inc. (NASDAQ:AUBN) is about to go ex-dividend in the next three days. Investors can purchase shares before the 9th of March in order to be eligible for this dividend, which will be paid on the 25th of March.

Auburn National Bancorporation's next dividend payment will be US$0.26 per share, on the back of last year when the company paid a total of US$1.02 to shareholders. Based on the last year's worth of payments, Auburn National Bancorporation stock has a trailing yield of around 2.3% on the current share price of $43.71. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Auburn National Bancorporation has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for Auburn National Bancorporation

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see Auburn National Bancorporation paying out a modest 49% of its earnings.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see how much of its profit Auburn National Bancorporation paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings fall far enough, the company could be forced to cut its dividend. That explains why we're not overly excited about Auburn National Bancorporation's flat earnings over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, Auburn National Bancorporation has lifted its dividend by approximately 2.7% a year on average.

Final Takeaway

Is Auburn National Bancorporation worth buying for its dividend? Auburn National Bancorporation's earnings per share are basically flat over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. It doesn't appear an outstanding opportunity, but could be worth a closer look.

Want to learn more about Auburn National Bancorporation's dividend performance? Check out this visualisation of its historical revenue and earnings growth.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

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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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