Evans Bancorp Inc (EVBN): A Comprehensive Analysis of Dividend Performance and Sustainability
Exploring the Dividend History, Yield and Growth of Evans Bancorp Inc
Evans Bancorp Inc (EVBN) recently announced a dividend of $0.66 per share, payable on 2023-10-18, with the ex-dividend date set for 2023-09-18. 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 Evans Bancorp Incs dividend performance and assess its sustainability.
Company Overview: What Does Evans Bancorp Inc Do?
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Evans Bancorp Inc is a financial holding company. Through its subsidiaries, it provides various banking services to consumers and commercial customers in the USA. The firm operates in two segments, Banking Activities and Insurance Agency Activities. The banking business segment includes both commercial and consumer banking services, including lending and depository services and offering non-deposit investment products, such as annuities and mutual funds. The insurance agency segment includes the activities of selling various premium-based insurance policies on a commission basis, including business and personal insurance, employee benefits, surety bonds, risk management, life, disability and long-term care coverage, and providing claims adjusting services to various insurance companies.
A Glimpse at Evans Bancorp Inc's Dividend History
Evans Bancorp Inc has maintained a consistent dividend payment record since 2001. Dividends are currently distributed on a bi-annually basis. Evans Bancorp Inc has increased its dividend each year since 2013. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 10 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Evans Bancorp Inc's Dividend Yield and Growth
As of today, Evans Bancorp Inc currently has a 12-month trailing dividend yield of 4.46% and a 12-month forward dividend yield of 4.53%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Evans Bancorp Inc's annual dividend growth rate was 6.60%. Extended to a five-year horizon, this rate increased to 9.50% per year. And over the past decade, Evans Bancorp Inc's annual dividends per share growth rate stands at an impressive 11.40%.
Based on Evans Bancorp Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Evans Bancorp Inc stock as of today is approximately 7.02%.
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, Evans Bancorp Inc's dividend payout ratio is 0.32.
Evans Bancorp Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Evans Bancorp Inc'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. Evans Bancorp Inc'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 Evans Bancorp Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Evans Bancorp Inc's revenue has increased by approximately 5.70% per year on average, a rate that underperforms than approximately 52.82% 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, Evans Bancorp Inc's earnings increased by approximately 5.70% per year on average, a rate that underperforms than approximately 58.77% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.50%, which underperforms than approximately 43.2% of global competitors.
Conclusion: A Balanced Perspective on Evans Bancorp Inc's Dividend
Evans Bancorp Inc's consistent dividend payment history, impressive growth rates, and robust profitability underscore its commitment to returning value to shareholders. However, the company's growth metrics and dividend payout ratio suggest a need for careful monitoring to ensure the sustainability of future dividends. As the company continues to navigate the financial landscape, investors should keep a close eye on these key indicators to make informed decisions.
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This article first appeared on GuruFocus.
