LCNB (NASDAQ:LCNB) Will Pay A Dividend Of $0.21

LCNB Corp. (NASDAQ:LCNB) has announced that it will pay a dividend of $0.21 per share on the 15th of September. The dividend yield will be 5.3% based on this payment which is still above the industry average.

Check out our latest analysis for LCNB

LCNB'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.

LCNB has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 45%, which means that LCNB would be able to pay its last dividend without pressure on the balance sheet.

Over the next year, EPS is forecast to fall by 1.2%. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 47%, which would be comfortable for the company to continue in the future.

LCNB Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the annual payment back then was $0.64, compared to the most recent full-year payment of $0.84. This means that it has been growing its distributions at 2.8% per annum over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

LCNB Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. LCNB has seen EPS rising for the last five years, at 9.5% per annum. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

We Really Like LCNB's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Now, if you want to look closer, it would be worth checking out our free research on LCNB management tenure, salary, and performance. 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.