Norwood Financial's (NASDAQ:NWFL) Dividend Will Be $0.29
The board of Norwood Financial Corp. (NASDAQ:NWFL) has announced that it will pay a dividend on the 1st of November, with investors receiving $0.29 per share. This means that the annual payment will be 4.3% of the current stock price, which is in line with the average for the industry.
View our latest analysis for Norwood Financial
Norwood Financial's Payment Expected To Have Solid Earnings Coverage
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
Norwood Financial has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Norwood Financial's last earnings report, the payout ratio is at a decent 34%, meaning that the company is able to pay out its dividend with a bit of room to spare.
If the trend of the last few years continues, EPS will grow by 17.0% over the next 12 months. If the dividend continues on this path, the future payout ratio could be 30% by next year, which we think can be pretty sustainable going forward.
Norwood Financial Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $0.752 in 2013, and the most recent fiscal year payment was $1.16. This implies that the company grew its distributions at a yearly rate of about 4.4% over that duration. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. Norwood Financial has impressed us by growing EPS at 17% per year over the past five years. Norwood Financial definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Norwood Financial Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Norwood Financial might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Are management backing themselves to deliver performance? Check their shareholdings in Norwood Financial 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
