CNB Financial (NASDAQ:CCNE) Has Affirmed Its Dividend Of $0.175

CNB Financial Corporation's (NASDAQ:CCNE) investors are due to receive a payment of $0.175 per share on 15th of September. This means the dividend yield will be fairly typical at 3.9%.

Check out our latest analysis for CNB Financial

CNB Financial's Dividend Forecasted To Be Well Covered By Earnings

We aren't too impressed by dividend yields unless they can be sustained over time.

Having distributed dividends for at least 10 years, CNB Financial has a long history of paying out a part of its earnings to shareholders. Using data from its latest earnings report, CNB Financial's payout ratio sits at 24%, an extremely comfortable number that shows that it can pay its dividend.

EPS is set to fall by 13.4% over the next 12 months. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 29%, which would be comfortable for the company to continue in the future.

CNB Financial Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2013, the dividend has gone from $0.66 total annually to $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

The company's investors will be pleased to have been receiving dividend income for some time. CNB Financial has impressed us by growing EPS at 10% 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.

An additional note is that the company has been raising capital by issuing stock equal to 24% of shares outstanding in the last 12 months. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.

CNB Financial Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think CNB Financial might even raise payments in the future. 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. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've identified 2 warning signs for CNB Financial (1 is significant!) that you should be aware of before investing. 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.