CB Financial Services (NASDAQ:CBFV) Is Due To Pay A Dividend Of $0.25

The board of CB Financial Services, Inc. (NASDAQ:CBFV) has announced that it will pay a dividend on the 30th of August, with investors receiving $0.25 per share. Based on this payment, the dividend yield on the company's stock will be 4.1%, which is an attractive boost to shareholder returns.

View our latest analysis for CB Financial Services

CB Financial Services' Earnings Will Easily Cover The Distributions

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.

CB Financial Services has a long history of paying out dividends, with its current track record at a minimum of 10 years. 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 44.2% over the next 12 months. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 42%, which we are pretty comfortable with and we think would be feasible on an earnings basis.

CB Financial Services Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.84 in 2014, and the most recent fiscal year payment was $1.00. This works out to be a compound annual growth rate (CAGR) of approximately 1.8% a year 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 Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that CB Financial Services has grown earnings per share at 17% 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.

We Really Like CB Financial Services' Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for CB Financial Services that investors should take into consideration. Is CB Financial Services not quite the opportunity you were looking for? Why not check out our selection of top 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.

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