Have you been keeping an eye on American National Bankshares Inc’s (NASDAQ:AMNB) upcoming dividend of US$0.25 per share payable on the 21 September 2018? Then you only have 2 days left before the stock starts trading ex-dividend on the 06 September 2018. Should you diversify into American National Bankshares and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
5 checks you should do on a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
- Is its annual yield among the top 25% of dividend-paying companies?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has it increased its dividend per share amount over the past?
- Is is able 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 does American National Bankshares fare?
American National Bankshares has a trailing twelve-month payout ratio of 45.9%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 39.5%, leading to a dividend yield of around 2.6%. However, EPS should increase to $2.8, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
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 AMNB it has increased its DPS from $0.92 to $1 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes AMNB a true dividend rockstar.
Relative to peers, American National Bankshares has a yield of 2.4%, which is on the low-side for Banks stocks.
Taking into account the dividend metrics, American National Bankshares ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three pertinent aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for AMNB’s future growth? Take a look at our free research report of analyst consensus for AMNB’s outlook.
- Valuation: What is AMNB 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 AMNB is currently mispriced by the market.
- 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 past 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. For errors that warrant correction please contact the editor at email@example.com.