AmeriServ Financial (NASDAQ:ASRV) Will Pay A Dividend Of $0.03
AmeriServ Financial, Inc. (NASDAQ:ASRV) will pay a dividend of $0.03 on the 20th of November. Based on this payment, the dividend yield will be 4.7%, which is fairly typical for the industry.
Check out our latest analysis for AmeriServ Financial
AmeriServ Financial's Payment Expected To Have Solid Earnings Coverage
Solid dividend yields are great, but they only really help us if the payment is sustainable.
AmeriServ Financial has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but AmeriServ Financial's payout ratio of 70% is a good sign as this means that earnings decently cover dividends.
If the company can't turn things around, EPS could fall by 8.7% over the next year. However, if the dividend continues along recent trends, we estimate the future payout ratio could reach 88%, meaning that most of the company's earnings is being paid out to shareholders.
AmeriServ Financial Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.04 in 2013 to the most recent total annual payment of $0.12. This means that it has been growing its distributions at 12% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
Dividend Growth Is Doubtful
Investors could be attracted to the stock based on the quality of its payment history. However, initial appearances might be deceiving. AmeriServ Financial has seen earnings per share falling at 8.7% per year over the last five years. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits.
Our Thoughts On AmeriServ Financial's Dividend
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. The low payout ratio is a redeeming feature, but generally we are not too happy with the payments AmeriServ Financial has been making. We don't think AmeriServ Financial is a great stock to add to your portfolio if income is your focus.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. 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 identified 3 warning signs for AmeriServ Financial (1 is significant!) that you should be aware of before investing. 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.
