Penns Woods Bancorp (NASDAQ:PWOD) Is Paying Out A Dividend Of $0.32

The board of Penns Woods Bancorp, Inc. (NASDAQ:PWOD) has announced that it will pay a dividend on the 20th of September, with investors receiving $0.32 per share. Based on this payment, the dividend yield on the company's stock will be 5.3%, which is an attractive boost to shareholder returns.

Check out our latest analysis for Penns Woods Bancorp

Penns Woods Bancorp's Earnings Will Easily Cover The Distributions

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.

Penns Woods Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Penns Woods Bancorp's last earnings report, the payout ratio is at a decent 54%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next year, EPS could expand by 7.3% if recent trends continue. Assuming the dividend continues along recent trends, we think the future payout ratio could be 51% by next year, which is in a pretty sustainable range.

Penns Woods Bancorp Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $1.23 in 2012 to the most recent total annual payment of $1.28. Dividend payments have grown at less than 1% a year over this period. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

We Could See Penns Woods Bancorp's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. Penns Woods Bancorp has seen EPS rising for the last five years, at 7.3% per annum. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

We Really Like Penns Woods Bancorp's Dividend

Overall, we like to see the dividend staying consistent, and we think Penns Woods Bancorp might even raise payments in the future. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Penns Woods Bancorp 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.