Ohio Valley Banc (NASDAQ:OVBC) Has Announced A Dividend Of US$0.21

By
Simply Wall St
Published
July 24, 2021
NasdaqGM:OVBC
Source: Shutterstock

Ohio Valley Banc Corp. (NASDAQ:OVBC) has announced that it will pay a dividend of US$0.21 per share on the 10th of August. This means the annual payment is 3.4% of the current stock price, which is above the average for the industry.

See our latest analysis for Ohio Valley Banc

Ohio Valley Banc's Dividend Is Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Before making this announcement, Ohio Valley Banc was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Looking forward, earnings per share could rise by 7.2% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 30% by next year, which is in a pretty sustainable range.

historic-dividend
NasdaqGM:OVBC Historic Dividend July 24th 2021

Ohio Valley Banc Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. There hasn't been much of a change in the dividend over the last 10. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

We Could See Ohio Valley Banc's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see Ohio Valley Banc has been growing its earnings per share at 7.2% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

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. 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. See if management have their own wealth at stake, by checking insider shareholdings in Ohio Valley Banc stock. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.

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This article by Simply Wall St is general in nature. 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.
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