Chemung Financial (NASDAQ:CHMG) Will Pay A Dividend Of $0.31

Chemung Financial Corporation's (NASDAQ:CHMG) investors are due to receive a payment of $0.31 per share on 2nd of October. This means that the annual payment will be 3.1% of the current stock price, which is in line with the average for the industry.

See our latest analysis for Chemung Financial

Chemung Financial's Earnings Will Easily Cover The Distributions

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, Chemung 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, Chemung Financial's latest earnings report puts its payout ratio at 21%, showing that the company can pay out its dividends comfortably.

EPS is set to fall by 9.2% over the next 12 months. But if the dividend continues along recent trends, we estimate the future payout ratio could be 24%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business in the future.

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 annual payment during the last 10 years was $1.00 in 2013, and the most recent fiscal year payment was $1.24. This means that it has been growing its distributions at 2.2% per annum over that time. 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. It's encouraging to see that Chemung Financial has been growing its earnings per share at 27% a 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.

Chemung Financial Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Chemung Financial might even raise payments in the future. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. 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. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Chemung Financial that investors should take into consideration. 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.