AmeriServ Financial (NASDAQ:ASRV) Has Affirmed Its Dividend Of $0.03
The board of AmeriServ Financial, Inc. (NASDAQ:ASRV) has announced that it will pay a dividend on the 22nd of August, with investors receiving $0.03 per share. This payment means that the dividend yield will be 3.0%, which is around the industry average.
See our latest analysis for AmeriServ Financial
AmeriServ Financial's Earnings Will Easily Cover The Distributions
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
AmeriServ Financial has established itself as a dividend paying company, given its 9-year history of distributing earnings to shareholders. While past data isn't a guarantee for the future, AmeriServ Financial's latest earnings report puts its payout ratio at 23%, showing that the company can pay out its dividends comfortably.
If the trend of the last few years continues, EPS will grow by 11.3% over the next 12 months. If the dividend continues on this path, the future payout ratio could be 25% by next year, which we think can be pretty sustainable going forward.
AmeriServ Financial Is Still Building Its Track Record
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 annual payment during the last 9 years was $0.04 in 2013, and the most recent fiscal year payment was $0.12. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. AmeriServ Financial has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that AmeriServ Financial has grown earnings per share at 11% 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.
AmeriServ Financial Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think AmeriServ Financial might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 2 warning signs for AmeriServ Financial that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
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