Ohio Valley Banc (NASDAQ:OVBC) Has Affirmed Its Dividend Of $0.22

Ohio Valley Banc Corp. (NASDAQ:OVBC) will pay a dividend of $0.22 on the 10th of February. This means that the annual payment will be 3.8% of the current stock price, which is in line with the average for the industry.

See our latest analysis for Ohio Valley Banc

Ohio Valley Banc's Payment Expected To Have Solid Earnings Coverage

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Having distributed dividends for at least 10 years, Ohio Valley Banc has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Ohio Valley Banc's payout ratio of 36% is a good sign as this means that earnings decently cover dividends.

If the trend of the last few years continues, EPS will grow by 2.9% over the next 12 months. Assuming the dividend continues along recent trends, we think the future payout ratio could be 35% by next year, which is in a pretty sustainable range.

Ohio Valley Banc Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the dividend has gone from $0.84 total annually to $0.88. Dividend payments have grown at less than 1% a year over this period. 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.

Dividend Growth May Be Hard To Achieve

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, Ohio Valley Banc has only grown its earnings per share at 2.9% per annum over the past five years. If Ohio Valley Banc is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

Ohio Valley Banc Looks Like A Great Dividend Stock

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 company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. See if management have their own wealth at stake, by checking insider shareholdings in Ohio Valley Banc stock. Is Ohio Valley Banc 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.