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Evans Bancorp Inc (NYSEMKT:EVBN): Dividend Is Coming In 4 Days, Should You Buy?

Scott Perkins

Investors who want to cash in on Evans Bancorp Inc’s (NYSEMKT:EVBN) upcoming dividend of US$0.46 per share have only 4 days left to buy the shares before its ex-dividend date, 11 September 2018, in time for dividends payable on the 04 October 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Evans Bancorp’s latest financial data to analyse its dividend characteristics.

Check out our latest analysis for Evans Bancorp

5 questions I ask before picking a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

  • Is its annual yield among the top 25% of dividend-paying companies?

  • Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?

  • Has it increased its dividend per share amount over the past?

  • Can it afford to pay the current rate of dividends from its earnings?

  • Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

AMEX:EVBN Historical Dividend Yield September 6th 18
AMEX:EVBN Historical Dividend Yield September 6th 18

Does Evans Bancorp pass our checks?

The company currently pays out 34.8% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 24.2%, leading to a dividend yield of 1.9%. However, EPS should increase to $3.42, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.

If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. In the case of EVBN it has increased its DPS from $0.82 to $0.92 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.

Relative to peers, Evans Bancorp has a yield of 1.9%, which is on the low-side for Banks stocks.

Next Steps:

Taking into account the dividend metrics, Evans Bancorp ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. I’ve put together three pertinent aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for EVBN’s future growth? Take a look at our free research report of analyst consensus for EVBN’s outlook.

  2. Valuation: What is EVBN worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether EVBN is currently mispriced by the market.

  3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.