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

The board of Ohio Valley Banc Corp. (NASDAQ:OVBC) has announced that it will pay a dividend of $0.22 per share on the 10th of August. Based on this payment, the dividend yield on the company's stock will be 3.9%, which is an attractive boost to shareholder returns.

Check out our latest analysis for Ohio Valley Banc

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

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.

Ohio Valley Banc has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Ohio Valley Banc's payout ratio of 37% is a good sign as this means that earnings decently cover dividends.

Over the next year, EPS could expand by 3.1% if recent trends continue. Assuming the dividend continues along recent trends, we think the future payout ratio could be 37% by next year, which is in a pretty sustainable range.

Ohio Valley Banc Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.84, compared to the most recent full-year payment of $0.88. Dividend payments have been growing, but very slowly over the period. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

Ohio Valley Banc May Find It Hard To Grow The Dividend

Investors could be attracted to the stock based on the quality of its payment history. Earnings has been rising at 3.1% per annum over the last five years, which admittedly is a bit slow. While growth may be thin on the ground, Ohio Valley Banc could always pay out a higher proportion of earnings to increase shareholder returns.

We Really Like Ohio Valley Banc'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. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com