Chemung Financial (NASDAQ:CHMG) Has Affirmed Its Dividend Of $0.31

The board of Chemung Financial Corporation (NASDAQ:CHMG) has announced that it will pay a dividend on the 2nd of January, with investors receiving $0.31 per share. This means the annual payment will be 2.6% of the current stock price, which is lower than the industry average.

View our latest analysis for Chemung Financial

Chemung Financial's Earnings Will Easily Cover The Distributions

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.

Chemung Financial has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past data isn't a guarantee for the future, Chemung Financial's latest earnings report puts its payout ratio at 20%, showing that the company can pay out its dividends comfortably.

Looking forward, earnings per share is forecast to fall by 11.6% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 23% over the same time period, which is in a pretty comfortable range.

Chemung 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. The dividend has gone from an annual total of $1.04 in 2013 to the most recent total annual payment of $1.24. This means that it has been growing its distributions at 1.8% per annum 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

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Chemung Financial has impressed us by growing EPS at 20% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.

We Really Like Chemung Financial's Dividend

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 distributions are easily covered by earnings, and there is plenty of cash being generated as well. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. 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 Chemung Financial that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.