LCNB's (NASDAQ:LCNB) Shareholders Will Receive A Bigger Dividend Than Last Year

LCNB Corp. (NASDAQ:LCNB) will increase its dividend on the 15th of December to $0.22, which is 4.8% higher than last year's payment from the same period of $0.21. This will take the dividend yield to an attractive 5.6%, providing a nice boost to shareholder returns.

See our latest analysis for LCNB

LCNB's Dividend Forecasted To Be Well Covered By Earnings

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

LCNB has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on LCNB's last earnings report, the payout ratio is at a decent 49%, meaning that the company is able to pay out its dividend with a bit of room to spare.

EPS is set to fall by 0.4% over the next 12 months. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 51%, which we are pretty comfortable with and we think would be feasible on an earnings basis.

LCNB Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was $0.64 in 2013, and the most recent fiscal year payment was $0.84. This implies that the company grew its distributions at a yearly rate of about 2.8% over that duration. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

We Could See LCNB's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that LCNB has been growing its earnings per share at 7.7% 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 LCNB's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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. All in all, this checks a lot of the boxes we look for when choosing an income 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. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in LCNB 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.