FNCB Bancorp (NASDAQ:FNCB) Is Due To Pay A Dividend Of $0.09
FNCB Bancorp, Inc. (NASDAQ:FNCB) will pay a dividend of $0.09 on the 15th of December. This means the annual payment is 5.9% of the current stock price, which is above the average for the industry.
Check out our latest analysis for FNCB Bancorp
FNCB Bancorp's Earnings Will Easily Cover The Distributions
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
Having paid out dividends for 8 years, FNCB Bancorp has a good history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but FNCB Bancorp's payout ratio of 49% is a good sign for current shareholders as this means that earnings decently cover dividends.
Looking forward, earnings per share could rise by 136.5% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the future payout ratio could be 25% by next year, which is in a pretty sustainable range.
FNCB Bancorp Doesn't Have A Long Payment History
Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. Since 2015, the annual payment back then was $0.08, compared to the most recent full-year payment of $0.36. This means that it has been growing its distributions at 21% per annum over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that FNCB Bancorp has been growing its earnings per share at 136% a year over the past five years. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that FNCB Bancorp could prove to be a strong dividend payer.
We Really Like FNCB Bancorp's Dividend
Overall, we like to see the dividend staying consistent, and we think FNCB Bancorp might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. For example, we've picked out 1 warning sign for FNCB Bancorp that investors should know about before committing capital to this stock. 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.
