Chemung Financial (NASDAQ:CHMG) Is Due To Pay A Dividend Of $0.31
The board of Chemung Financial Corporation (NASDAQ:CHMG) has announced that it will pay a dividend on the 3rd of July, with investors receiving $0.31 per share. This means the dividend yield will be fairly typical at 3.3%.
View our latest analysis for Chemung Financial
Chemung Financial's Earnings Will Easily Cover The Distributions
Solid dividend yields are great, but they only really help us if the payment is sustainable.
Chemung Financial has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past data isn't a guarantee for the future, Chemung Financial's latest earnings report puts its payout ratio at 20%, showing that the company can pay out its dividends comfortably.
Looking forward, earnings per share is forecast to fall by 8.0% over the next year. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 22%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
Chemung Financial 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 $1.00 in 2013, and the most recent fiscal year payment was $1.24. This means that it has been growing its distributions at 2.2% per annum 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
Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Chemung Financial has been growing its earnings per share at 27% a year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.
Chemung Financial Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. 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 in all, this checks a lot of the boxes we look for when choosing an income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for Chemung Financial that investors need to be conscious of moving forward. Is Chemung Financial 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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