Virginia National Bankshares (NASDAQ:VABK) Will Pay A Dividend Of $0.30

The board of Virginia National Bankshares Corporation (NASDAQ:VABK) has announced that it will pay a dividend on the 30th of December, with investors receiving $0.30 per share. Based on this payment, the dividend yield will be 3.4%, which is fairly typical for the industry.

Check out the opportunities and risks within the US Banks industry.

Virginia National Bankshares' Dividend Forecasted To Be Well Covered By Earnings

We aren't too impressed by dividend yields unless they can be sustained over time.

Virginia National Bankshares has established itself as a dividend paying company, given its 9-year history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Virginia National Bankshares' payout ratio of 29% is a good sign for current shareholders as this means that earnings decently cover dividends.

If the trend of the last few years continues, EPS will grow by 9.2% over the next 12 months. If the dividend continues along recent trends, we estimate the future payout ratio will be 32%, which is in the range that makes us comfortable with the sustainability of the dividend.

Virginia National Bankshares Doesn't Have A Long Payment History

Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. The dividend has gone from an annual total of $0.181 in 2013 to the most recent total annual payment of $1.20. This implies that the company grew its distributions at a yearly rate of about 23% over that duration. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

Virginia National Bankshares Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Virginia National Bankshares has grown earnings per share at 9.2% per 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.

We Really Like Virginia National Bankshares' Dividend

Overall, we like to see the dividend staying consistent, and we think Virginia National Bankshares might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for Virginia National Bankshares that investors should know about before committing capital to this stock. Is Virginia National Bankshares 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.