ConnectOne Bancorp's (NASDAQ:CNOB) Dividend Will Be $0.18

The board of ConnectOne Bancorp, Inc. (NASDAQ:CNOB) has announced that it will pay a dividend of $0.18 per share on the 3rd of March. Based on this payment, the dividend yield will be 2.7%, which is fairly typical for the industry.

View our latest analysis for ConnectOne Bancorp

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

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

ConnectOne Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on ConnectOne Bancorp's last earnings report, the payout ratio is at a decent 41%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next 3 years, EPS is forecast to expand by 141.6%. The future payout ratio could be 23% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

ConnectOne Bancorp Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the dividend has gone from $0.30 total annually to $0.72. This implies that the company grew its distributions at a yearly rate of about 9.1% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

Dividend Growth May Be Hard To Achieve

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. In the last five years, ConnectOne Bancorp's earnings per share has shrunk at approximately 3.1% per annum. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed. It's not all bad news though, as the earnings are predicted to rise over the next 12 months - we would just be a bit cautious until this can turn into a longer term trend.

In Summary

Overall, we think ConnectOne Bancorp is a solid choice as a dividend stock, even though the dividend wasn't raised this year. With shrinking earnings, the company may see some issues maintaining the dividend even though they look pretty sustainable for now. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Given that earnings are not growing, the dividend does not look nearly so attractive. Businesses can change though, and we think it would make sense to see what analysts are forecasting for the company. Is ConnectOne Bancorp 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.