Stock Analysis

There's A Lot To Like About Codorus Valley Bancorp's (NASDAQ:CVLY) Upcoming US$0.15 Dividend

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Readers hoping to buy Codorus Valley Bancorp, Inc. (NASDAQ:CVLY) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. This means that investors who purchase Codorus Valley Bancorp's shares on or after the 25th of April will not receive the dividend, which will be paid on the 10th of May.

The company's next dividend payment will be US$0.15 per share, and in the last 12 months, the company paid a total of US$0.48 per share. Looking at the last 12 months of distributions, Codorus Valley Bancorp has a trailing yield of approximately 2.0% on its current stock price of $23.45. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Codorus Valley Bancorp has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Codorus Valley Bancorp

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Codorus Valley Bancorp paid out a comfortable 32% of its profit last year.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit Codorus Valley Bancorp paid out over the last 12 months.

NasdaqGM:CVLY Historic Dividend April 20th 2022

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see Codorus Valley Bancorp earnings per share are up 2.7% per annum over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, Codorus Valley Bancorp has lifted its dividend by approximately 7.0% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Is Codorus Valley Bancorp worth buying for its dividend? Codorus Valley Bancorp has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. In summary, Codorus Valley Bancorp appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

On that note, you'll want to research what risks Codorus Valley Bancorp is facing. Our analysis shows 2 warning signs for Codorus Valley Bancorp that we strongly recommend you have a look at before investing in the company.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

What are the risks and opportunities for Codorus Valley Bancorp?

Codorus Valley Bancorp, Inc. operates as the bank holding company for the PeoplesBank that provides community banking services in South Central Pennsylvania and Central Maryland.

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  • Trading at 30.5% below our estimate of its fair value

  • Earnings grew by 84.8% over the past year


  • Earnings are forecast to decline by an average of 17.4% per year for the next 3 years

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