A large part of investment returns can be generated by dividend-paying stock given their role in compounding returns over time. LCNB Corp (NASDAQ:LCNB) has returned to shareholders over the past 10 years, an average dividend yield of 5.00% annually. Let’s dig deeper into whether LCNB should have a place in your portfolio. Check out our latest analysis for LCNB
5 checks you should use to assess a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is their annual yield among the top 25% of dividend payers?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- 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?
How well does LCNB fit our criteria?
The company currently pays out 49.23% of its earnings as a dividend, meaning the dividend is sufficiently covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of LCNB it has increased its DPS from $0.62 to $0.64 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes LCNB a true dividend rockstar. Compared to its peers, LCNB has a yield of 3.06%, which is on the low-side for banks stocks.
With this in mind, I definitely rank LCNB as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three relevant factors you should further research:
1. Future Outlook: What are well-informed industry analysts predicting for LCNB’s future growth? Take a look at our free research report of analyst consensus for LCNB’s outlook.
2. Valuation: What is LCNB 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 LCNB 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 pass 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.