CB Financial Services (NASDAQ:CBFV) Has Affirmed Its Dividend Of $0.25

CB Financial Services, Inc. (NASDAQ:CBFV) has announced that it will pay a dividend of $0.25 per share on the 29th of February. This makes the dividend yield 4.2%, which will augment investor returns quite nicely.

View our latest analysis for CB Financial Services

CB Financial Services' Dividend Forecasted To Be Well Covered By Earnings

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, CB Financial Services has a long history of paying out a part of its earnings to shareholders. Using data from its latest earnings report, CB Financial Services' payout ratio sits at 23%, an extremely comfortable number that shows that it can pay its dividend.

EPS is set to fall by 75.9% over the next 3 years. Fortunately, analysts forecast the future payout ratio to be 48% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.

CB Financial Services Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.84, compared to the most recent full-year payment of $1.00. This means that it has been growing its distributions at 1.8% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. CB Financial Services has impressed us by growing EPS at 25% per year over the past five years. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.

Our Thoughts On CB Financial Services' Dividend

Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. The company hasn't been paying a very consistent dividend over time, despite only paying out a small portion of earnings. Overall, we don't think this company has the makings of a good income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for CB Financial Services that investors should take into consideration. 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.