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Penns Woods Bancorp (NASDAQ:PWOD) Has Affirmed Its Dividend Of US$0.32

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Penns Woods Bancorp, Inc. (NASDAQ:PWOD) has announced that it will pay a dividend of US$0.32 per share on the 21st of June. The dividend yield will be 5.5% based on this payment which is still above the industry average.

Check out our latest analysis for Penns Woods Bancorp

Penns Woods Bancorp's Dividend Is Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. Based on the last payment, Penns Woods Bancorp was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 5.9% if recent trends continue. If the dividend continues on this path, the payout ratio could be 53% by next year, which we think can be pretty sustainable going forward.

historic-dividend
historic-dividend

Penns Woods Bancorp Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The first annual payment during the last 10 years was US$1.23 in 2012, and the most recent fiscal year payment was US$1.28. Dividend payments have been growing, but very slowly over the period. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

We Could See Penns Woods Bancorp's Dividend Growing

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that Penns Woods Bancorp has grown earnings per share at 5.9% 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.

Penns Woods Bancorp Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Penns Woods Bancorp might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. 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 Penns Woods Bancorp in our latest insider ownership analysis. Is Penns Woods Bancorp not quite the opportunity you were looking for? Why not check out our selection of top 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.