Citizens & Northern (NASDAQ:CZNC) Is Due To Pay A Dividend Of US$0.28

Citizens & Northern Corporation's (NASDAQ:CZNC) investors are due to receive a payment of US$0.28 per share on 13th of May. This means the annual payment is 4.6% of the current stock price, which is above the average for the industry.

See our latest analysis for Citizens & Northern

Citizens & Northern's Dividend Is Well Covered By Earnings

A big dividend yield for a few years doesn't mean much if it can't be sustained. Prior to this announcement, Citizens & Northern's dividend was comfortably covered by both cash flow and earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

The next year is set to see EPS grow by 4.5%. If the dividend continues on this path, the payout ratio could be 60% by next year, which we think can be pretty sustainable going forward.

Citizens & Northern Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2012, the dividend has gone from US$0.64 to US$1.12. This means that it has been growing its distributions at 5.8% per annum over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

We Could See Citizens & Northern's Dividend Growing

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Citizens & Northern has seen EPS rising for the last five years, at 7.0% per annum. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in Citizens & Northern stock. If you are a dividend investor, you might also want to look at our curated list of high yield 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.