CB Financial Services (NASDAQ:CBFV) Has Announced A Dividend Of $0.24

CB Financial Services, Inc. (NASDAQ:CBFV) has announced that it will pay a dividend of $0.24 per share on the 30th of November. Based on this payment, the dividend yield on the company's stock will be 4.4%, which is an attractive boost to shareholder returns.

See our latest analysis for CB Financial Services

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

A big dividend yield for a few years doesn't mean much if it can't be sustained.

Having paid out dividends for 8 years, CB Financial Services has a good history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio of 35%shows that CB Financial Services would be able to pay its last dividend without pressure on the balance sheet.

Over the next 3 years, EPS is forecast to expand by 28.9%. The future payout ratio could be 35% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

CB Financial Services Is Still Building Its Track Record

It is great to see that CB Financial Services has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The annual payment during the last 8 years was $0.84 in 2014, and the most recent fiscal year payment was $0.96. This implies that the company grew its distributions at a yearly rate of about 1.7% over that duration. We like that the dividend hasn't been shrinking. However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income.

We Could See CB Financial Services' Dividend Growing

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. CB Financial Services has seen EPS rising for the last five years, at 8.2% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

CB Financial Services 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. 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. 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 CB Financial Services that you should be aware of before investing. Is CB Financial Services not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.