LCNB (NASDAQ:LCNB) Is Paying Out A Larger Dividend Than Last Year
LCNB Corp.'s (NASDAQ:LCNB) periodic dividend will be increasing on the 15th of December to $0.22, with investors receiving 4.8% more than last year's $0.21. This will take the annual payment to 5.6% of the stock price, which is above what most companies in the industry pay.
See our latest analysis for LCNB
LCNB'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.
LCNB has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on LCNB's last earnings report, the payout ratio is at a decent 49%, meaning that the company is able to pay out its dividend with a bit of room to spare.
EPS is set to fall by 0.4% over the next 12 months. But if the dividend continues along recent trends, we estimate the future payout ratio could be 51%, 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 been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The annual payment during the last 10 years was $0.64 in 2013, and the most recent fiscal year payment was $0.84. This means that it has been growing its distributions at 2.8% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
We Could See LCNB's Dividend Growing
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 LCNB has been growing its earnings per share at 7.7% a year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.
LCNB Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. 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. Are management backing themselves to deliver performance? Check their shareholdings in LCNB in our latest insider ownership analysis. 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.
