Chemung Financial (NASDAQ:CHMG) Has Affirmed Its Dividend Of $0.31
The board of Chemung Financial Corporation (NASDAQ:CHMG) has announced that it will pay a dividend of $0.31 per share on the 2nd of October. This means that the annual payment will be 3.1% of the current stock price, which is in line with the average for the industry.
See our latest analysis for Chemung Financial
Chemung Financial's Payment Expected To Have Solid Earnings Coverage
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
Having distributed dividends for at least 10 years, Chemung Financial has a long history of paying out a part of its earnings to shareholders. Using data from its latest earnings report, Chemung Financial's payout ratio sits at 21%, an extremely comfortable number that shows that it can pay its dividend.
Over the next year, EPS is forecast to fall by 9.2%. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 24%, which would be comfortable for the company to continue in the future.
Chemung Financial Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $1.00 in 2013, and the most recent fiscal year payment was $1.24. This works out to be a compound annual growth rate (CAGR) of approximately 2.2% a year over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Chemung Financial has been growing its earnings per share at 27% a year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.
We Really Like Chemung Financial'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. The earnings easily cover the company's distributions, and the company is generating plenty of cash. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. 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. 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 Chemung Financial 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.
