CB Financial Services (NASDAQ:CBFV) Is Increasing Its Dividend To $0.25
The board of CB Financial Services, Inc. (NASDAQ:CBFV) has announced that it will be paying its dividend of $0.25 on the 31st of May, an increased payment from last year's comparable dividend. This makes the dividend yield 4.8%, which is above the industry average.
See our latest analysis for CB Financial Services
CB Financial Services' 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.
CB Financial Services has a good history of paying out dividends, with its current track record at 9 years. Past distributions do not necessarily guarantee future ones, but CB Financial Services' payout ratio of 40% is a good sign for current shareholders as this means that earnings decently cover dividends.
The next year is set to see EPS grow by 11.6%. If the dividend continues on this path, the future payout ratio could be 37% by next year, which we think can be pretty sustainable going forward.
CB Financial Services Doesn't Have A Long Payment History
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. Since 2014, the dividend has gone from $0.84 total annually to $1.00. This works out to be a compound annual growth rate (CAGR) of approximately 2.0% a year over that time. CB Financial Services hasn't been paying a dividend for very long, so we wouldn't get to excited about its record of growth just yet.
The Dividend Has Growth Potential
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that CB Financial Services has been growing its earnings per share at 8.4% a year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.
We Really Like CB Financial Services' Dividend
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for CB Financial Services that you should be aware of before investing. Is CB Financial Services not quite the opportunity you were looking for? Why not check out our selection of top 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.
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