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Here's What We Like About LCNB's (NASDAQ:LCNB) Upcoming Dividend

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see LCNB Corp. (NASDAQ:LCNB) is about to trade ex-dividend in the next 4 days. You will need to purchase shares before the 30th of November to receive the dividend, which will be paid on the 15th of December.

LCNB's next dividend payment will be US$0.19 per share. Last year, in total, the company distributed US$0.72 to shareholders. Looking at the last 12 months of distributions, LCNB has a trailing yield of approximately 4.8% on its current stock price of $15.85. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.

Check out our latest analysis for LCNB

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see LCNB paying out a modest 49% of its earnings.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see how much of its profit LCNB paid out over the last 12 months.

historic-dividend
historic-dividend

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at LCNB, with earnings per share up 6.9% on average over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. LCNB has delivered an average of 1.7% per year annual increase in its dividend, based on the past 10 years of dividend payments.

To Sum It Up

Should investors buy LCNB for the upcoming dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Overall, LCNB looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while LCNB has an appealing dividend, it's worth knowing the risks involved with this stock. In terms of investment risks, we've identified 1 warning sign with LCNB and understanding them should be part of your investment process.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

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