Citizens Holding's (NASDAQ:CIZN) Dividend Will Be Reduced To $0.16
Citizens Holding Company (NASDAQ:CIZN) is reducing its dividend to $0.16 on the 30th of Junewhich is 33% less than last year's comparable payment of $0.24. The yield is still above the industry average at 7.9%.
Check out our latest analysis for Citizens Holding
Citizens Holding's Dividend Forecasted To Be Well Covered By Earnings
If the payments aren't sustainable, a high yield for a few years won't matter that much.
Citizens Holding has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Citizens Holding's last earnings report, the payout ratio is at a decent 62%, meaning that the company is able to pay out its dividend with a bit of room to spare.
If the trend of the last few years continues, EPS will grow by 13.4% over the next 12 months. Assuming the dividend continues along recent trends, we think the future payout ratio could be 50% by next year, which is in a pretty sustainable range.
Citizens Holding Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.88 in 2013 to the most recent total annual payment of $0.96. Dividend payments have been growing, but very slowly over the period. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Citizens Holding has grown earnings per share at 13% per year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.
We Really Like Citizens Holding's Dividend
In general, we don't like to see the dividend being cut, especially when the company has such high potential like Citizens Holding does. By reducing the dividend, pressure will be taken off the balance sheet, which could help the dividend to be consistent in the future. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for Citizens Holding that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
