Chemung Financial (NASDAQ:CHMG) Is Due To Pay A Dividend Of $0.31

The board of Chemung Financial Corporation (NASDAQ:CHMG) has announced that it will pay a dividend of $0.31 per share on the 2nd of January. The dividend yield is 2.4% based on this payment, which is a little bit low compared to the other companies in the industry.

View our latest analysis for Chemung Financial

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

If it is predictable over a long period, even low dividend yields can be attractive.

Chemung Financial has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 27%, which means that Chemung Financial would be able to pay its last dividend without pressure on the balance sheet.

The next 3 years are set to see EPS grow by 53.1%. Analysts forecast the future payout ratio could be 20% over the same time horizon, which is a number we think the company can maintain.

Chemung Financial Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was $1.04 in 2014, and the most recent fiscal year payment was $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.

We Could See Chemung Financial's Dividend Growing

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 seen EPS rising for the last five years, at 5.1% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

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. 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.

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. For instance, we've picked out 1 warning sign for Chemung Financial that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield 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.