FNCB Bancorp (NASDAQ:FNCB) Is Paying Out A Dividend Of $0.09
The board of FNCB Bancorp, Inc. (NASDAQ:FNCB) has announced that it will pay a dividend of $0.09 per share on the 15th of September. The dividend yield will be 5.9% based on this payment which is still above the industry average.
Check out our latest analysis for FNCB Bancorp
FNCB Bancorp's Earnings Will Easily Cover The Distributions
If the payments aren't sustainable, a high yield for a few years won't matter that much.
FNCB Bancorp has established itself as a dividend paying company, given its 7-year history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio of 45%shows that FNCB Bancorp would be able to pay its last dividend without pressure on the balance sheet.
Over the next year, EPS could expand by 86.9% if recent trends continue. If the dividend continues on this path, the future payout ratio could be 29% by next year, which we think can be pretty sustainable going forward.
FNCB Bancorp Is Still Building Its Track Record
FNCB Bancorp's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The dividend has gone from an annual total of $0.08 in 2016 to the most recent total annual payment of $0.36. This works out to be a compound annual growth rate (CAGR) of approximately 24% a year over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
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. FNCB Bancorp has impressed us by growing EPS at 87% per year over the past five years. The company doesn't have any problems growing, despite returning a lot of capital to shareholders, which is a very nice combination for a dividend stock to have.
We Really Like FNCB Bancorp's Dividend
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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.
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 instance, we've picked out 1 warning sign for FNCB Bancorp that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
