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On the 01 May 2019, ConnectOne Bancorp, Inc. (NASDAQ:CNOB) will be paying shareholders an upcoming dividend amount of US$0.09 per share. However, investors must have bought the company's stock before 12 April 2019 in order to qualify for the payment. That means you have only 4 days left! What does this mean for current shareholders and potential investors? Below, I will explain how holding ConnectOne Bancorp can impact your portfolio income stream, by analysing the stock's most recent financial data and dividend attributes.
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is its annual yield among the top 25% of dividend-paying companies?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has dividend per share risen in the past couple of years?
Is its earnings sufficient to payout dividend at the current rate?
Will it have the ability to keep paying its dividends going forward?
How does ConnectOne Bancorp fare?
ConnectOne Bancorp has a trailing twelve-month payout ratio of 16%, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect CNOB's payout to remain around the same level at 17% of its earnings. Assuming a constant share price, this equates to a dividend yield of 1.9%. Furthermore, EPS should increase to $2.13.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. The reality facing CNOB investors is that whilst it has continued to pay shareholders dividend, dividends are lower today, than they were a decade ago. However, income investors that value stability over growth may still find CNOB appealing.
In terms of its peers, ConnectOne Bancorp generates a yield of 1.7%, which is on the low-side for Banks stocks.
Taking into account the dividend metrics, ConnectOne Bancorp ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. Below, I've compiled three key aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for CNOB’s future growth? Take a look at our free research report of analyst consensus for CNOB’s outlook.
Valuation: What is CNOB worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CNOB is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.