ConnectOne Bancorp (NASDAQ:CNOB) Will Pay A Dividend Of $0.18

The board of ConnectOne Bancorp, Inc. (NASDAQ:CNOB) has announced that it will pay a dividend on the 1st of December, with investors receiving $0.18 per share. This payment means that the dividend yield will be 3.0%, which is around the industry average.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

ConnectOne Bancorp's Dividend Forecasted To Be Well Covered By Earnings

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, ConnectOne Bancorp has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but ConnectOne Bancorp's payout ratio of 55% is a good sign as this means that earnings decently cover dividends.

Analysts expect a massive rise in earnings per share in the next 3 years. They also estimate that the future payout ratio will be 23% in the same time horizon, so there isn't too much pressure on the dividend.

Check out our latest analysis for ConnectOne Bancorp

ConnectOne Bancorp Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.30 in 2015 to the most recent total annual payment of $0.72. This implies that the company grew its distributions at a yearly rate of about 9.1% over that duration. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

Dividend Growth Is Doubtful

Investors could be attracted to the stock based on the quality of its payment history. Let's not jump to conclusions as things might not be as good as they appear on the surface. ConnectOne Bancorp has seen earnings per share falling at 8.6% per year over the last five years. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits. However, the next year is actually looking up, with earnings set to rise. We would just wait until it becomes a pattern before getting too excited.

We should note that ConnectOne Bancorp has issued stock equal to 31% of shares outstanding. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.

Our Thoughts On ConnectOne Bancorp's Dividend

Overall, a consistent dividend is a good thing, and we think that ConnectOne Bancorp has the ability to continue this into the future. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. This looks like it could be a good dividend stock going forward, but we would note that the payout ratio has been at higher levels in the past so it could happen again.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Case in point: We've spotted 3 warning signs for ConnectOne Bancorp (of which 1 is potentially serious!) you should know about. Is ConnectOne Bancorp not quite the opportunity you were looking for? Why not check out our selection of top 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.