The board of CNB Financial Corporation (NASDAQ:CCNE) has announced that it will pay a dividend on the 15th of September, with investors receiving $0.175 per share. This means that the annual payment will be 2.6% of the current stock price, which is in line with the average for the industry.
CNB Financial's Payment Expected To Have Solid Earnings Coverage
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
Having distributed dividends for at least 10 years, CNB Financial has a long history of paying out a part of its earnings to shareholders. While past data isn't a guarantee for the future, CNB Financial's latest earnings report puts its payout ratio at 21%, showing that the company can pay out its dividends comfortably.
Over the next year, EPS is forecast to expand by 8.6%. If the dividend continues along recent trends, we estimate the future payout ratio will be 20%, which is in the range that makes us comfortable with the sustainability of the dividend.
CNB Financial Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $0.66 in 2012 to the most recent total annual payment of $0.70. Dividend payments have grown at less than 1% a year over this period. 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. It's encouraging to see that CNB Financial has been growing its earnings per share at 15% a 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.
CNB Financial 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. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 3 analysts we track are forecasting for CNB Financial for free with public analyst estimates for the company. Is CNB Financial 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.