Citizens & Northern (NASDAQ:CZNC) Is Paying Out A Dividend Of $0.28

Citizens & Northern Corporation (NASDAQ:CZNC) has announced that it will pay a dividend of $0.28 per share on the 14th of February. Based on this payment, the dividend yield on the company's stock will be 4.7%, which is an attractive boost to shareholder returns.

See our latest analysis for Citizens & Northern

Citizens & Northern's Dividend Forecasted To Be Well Covered By Earnings

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.

Citizens & Northern has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Citizens & Northern's payout ratio of 66% is a good sign as this means that earnings decently cover dividends.

The next 3 years are set to see EPS grow by 25.1%. Analysts estimate the future payout ratio will be 56% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

Citizens & Northern Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the dividend has gone from $0.80 total annually to $1.12. This implies that the company grew its distributions at a yearly rate of about 3.4% over that duration. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

The Dividend Has Growth Potential

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that Citizens & Northern has been growing its earnings per share at 9.0% a year over the past five years. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Are management backing themselves to deliver performance? Check their shareholdings in Citizens & Northern in our latest insider ownership analysis. 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.