Chemung Financial Corp (CHMG): A Deep Dive into Its Dividend Performance and Sustainability
An in-depth analysis of Chemung Financial Corp's dividend history, yield, and growth rates using GuruFocus data.
Chemung Financial Corp(NASDAQ:CHMG) recently announced a dividend of $0.31 per share, payable on 2023-10-02, with the ex-dividend date set for 2023-09-15. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Chemung Financial Corps dividend performance and assess its sustainability.
What Does Chemung Financial Corp Do?
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Chemung Financial Corp is a bank holding firm. It provides financial services, including demand, savings, and time deposits, commercial, residential, and consumer loans, letters of credit, wealth management services, employee benefit plans, securities, and insurance brokerage services. Its business operations are organized into two segments, Core Banking, and Wealth Management services. It derives its revenues from the core banking business.
A Glimpse at Chemung Financial Corp's Dividend History
Chemung Financial Corp has maintained a consistent dividend payment record since 1993. Dividends are currently distributed on a quarterly basis. Chemung Financial Corp has increased its dividend each year since 1993. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 30 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Chemung Financial Corp's Dividend Yield and Growth
As of today, Chemung Financial Corp currently has a 12-month trailing dividend yield of 3.05% and a 12-month forward dividend yield of 3.05%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Chemung Financial Corp's annual dividend growth rate was 6.00%. Extended to a five-year horizon, this rate decreased to 3.70% per year. And over the past decade, Chemung Financial Corp's annual dividends per share growth rate stands at 1.50%.
Based on Chemung Financial Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Chemung Financial Corp stock as of today is approximately 3.66%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Chemung Financial Corp's dividend payout ratio is 0.21.
Chemung Financial Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Chemung Financial Corp's profitability 5 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Chemung Financial Corp's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Chemung Financial Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Chemung Financial Corp's revenue has increased by approximately 7.10% per year on average, a rate that outperforms than approximately 54.79% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Chemung Financial Corp's earnings increased by approximately 24.10% per year on average, a rate that outperforms than approximately 79.98% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 26.00%, which outperforms than approximately 88.5% of global competitors.
Next Steps
In conclusion, Chemung Financial Corp presents a compelling case for dividend investors. The company's consistent dividend payments, reasonable growth rate, and sustainable payout ratio underscore its potential as a stable income-generating investment. Moreover, the company's robust profitability and growth metrics further reinforce the sustainability of its dividends in the long run. However, as always, potential investors are advised to conduct their due diligence before making any investment decisions.
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This article first appeared on GuruFocus.
