Western New England Bancorp (NASDAQ:WNEB) Is Due To Pay A Dividend Of US$0.05

Western New England Bancorp, Inc.'s (NASDAQ:WNEB) investors are due to receive a payment of US$0.05 per share on 25th of August. The dividend yield is 2.4% based on this payment, which is a little bit low compared to the other companies in the industry.

Check out our latest analysis for Western New England Bancorp

Western New England Bancorp's Earnings Easily Cover the Distributions

If it is predictable over a long period, even low dividend yields can be attractive. However, Western New England Bancorp's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

The next year is set to see EPS grow by 12.4%. If the dividend continues on this path, the payout ratio could be 24% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2011, the dividend has gone from US$0.54 to US$0.20. This works out to be a decline of approximately 9.5% per year over that time. Generally, we don't like to see a dividend that has been declining over time as this can degrade shareholders' returns and indicate that the company may be running into problems.

The Dividend Looks Likely To Grow

Given that dividend payments have been shrinking like a glacier in a warming world, we need to check if there are some bright spots on the horizon. We are encouraged to see that Western New England Bancorp has grown earnings per share at 20% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

We Really Like Western New England Bancorp's Dividend

Overall, we like to see the dividend staying consistent, and we think Western New England 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.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Case in point: We've spotted 2 warning signs for Western New England Bancorp (of which 1 is significant!) you should know about. If you are a dividend investor, you might also want to look at our curated list of high performing dividend stock.

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