Citizens & Northern (NASDAQ:CZNC) Has Affirmed Its Dividend Of $0.28

The board of Citizens & Northern Corporation (NASDAQ:CZNC) has announced that it will pay a dividend of $0.28 per share on the 12th of May. Based on this payment, the dividend yield on the company's stock will be 5.7%, which is an attractive boost to shareholder returns.

Check out our latest analysis for Citizens & Northern

Citizens & Northern's Earnings Will Easily Cover The Distributions

A big dividend yield for a few years doesn't mean much if it can't be sustained.

Citizens & Northern has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Citizens & Northern's last earnings report, the payout ratio is at a decent 67%, meaning that the company is able to pay out its dividend with a bit of room to spare.

EPS is set to fall by 1.6% over the next 12 months. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 70%, which we are pretty comfortable with and we think would be feasible on an earnings basis.

Citizens & Northern Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $0.88 in 2013, and the most recent fiscal year payment was $1.12. This implies that the company grew its distributions at a yearly rate of about 2.4% over that duration. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

We Could See Citizens & Northern'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. Citizens & Northern has impressed us by growing EPS at 7.0% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

We Really Like Citizens & Northern's Dividend

Overall, we like to see the dividend staying consistent, and we think Citizens & Northern might even raise payments in the future. The earnings easily cover the company's distributions, and the company is generating plenty of cash. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for Citizens & Northern that investors should know about before committing capital to this stock. Is Citizens & Northern 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.