LCNB (NASDAQ:LCNB) Is Due To Pay A Dividend Of $0.21
The board of LCNB Corp. (NASDAQ:LCNB) has announced that it will pay a dividend of $0.21 per share on the 15th of June. This means the annual payment is 5.6% of the current stock price, which is above the average for the industry.
View our latest analysis for LCNB
LCNB's Dividend Forecasted To Be Well Covered By Earnings
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.
LCNB has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on LCNB's last earnings report, the payout ratio is at a decent 43%, meaning that the company is able to pay out its dividend with a bit of room to spare.
EPS is set to fall by 17.1% over the next 12 months. But if the dividend continues along recent trends, we estimate the future payout ratio could be 54%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business in the future.
LCNB Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $0.64 in 2013 to the most recent total annual payment of $0.84. This implies that the company grew its distributions at a yearly rate of about 2.8% over that duration. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.
LCNB Could Grow Its Dividend
The company's investors will be pleased to have been receiving dividend income for some time. LCNB has impressed us by growing EPS at 9.3% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.
LCNB Looks Like A Great Dividend Stock
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. The earnings easily cover the company's distributions, and the company is generating plenty of cash. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All in all, this checks a lot of the boxes we look for when choosing an income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for LCNB that investors need to be conscious of moving forward. 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.
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