Auburn National Bancorporation (NASDAQ:AUBN) Has Affirmed Its Dividend Of $0.27
The board of Auburn National Bancorporation, Inc. (NASDAQ:AUBN) has announced that it will pay a dividend of $0.27 per share on the 26th of December. This makes the dividend yield 5.2%, which will augment investor returns quite nicely.
See our latest analysis for Auburn National Bancorporation
Auburn National Bancorporation's Payment Expected To Have Solid Earnings Coverage
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Auburn National Bancorporation has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 38%, which means that Auburn National Bancorporation would be able to pay its last dividend without pressure on the balance sheet.
Looking forward, earnings per share could rise by 4.5% over the next year if the trend from the last few years continues. If the dividend continues on this path, the future payout ratio could be 38% by next year, which we think can be pretty sustainable going forward.
Auburn National Bancorporation Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was $0.84 in 2013, and the most recent fiscal year payment was $1.08. This works out to be a compound annual growth rate (CAGR) of approximately 2.5% a year over that time. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.
Dividend Growth May Be Hard To Achieve
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings have grown at around 4.5% a year for the past five years, which isn't massive but still better than seeing them shrink. While EPS growth is quite low, Auburn National Bancorporation has the option to increase the payout ratio to return more cash to shareholders.
We Really Like Auburn National Bancorporation's Dividend
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. 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.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Auburn National Bancorporation that investors should take into consideration. 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.
