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Why You Might Be Interested In CNB Financial Corporation (NASDAQ:CCNE) For Its Upcoming Dividend

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Simply Wall St
·3 min read
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CNB Financial Corporation (NASDAQ:CCNE) stock is about to trade ex-dividend in 4 days. You can purchase shares before the 26th of February in order to receive the dividend, which the company will pay on the 15th of March.

CNB Financial's next dividend payment will be US$0.17 per share, on the back of last year when the company paid a total of US$0.68 to shareholders. Last year's total dividend payments show that CNB Financial has a trailing yield of 2.9% on the current share price of $23.8. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for CNB Financial

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see CNB Financial paying out a modest 34% of its earnings.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

historic-dividend
historic-dividend

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're encouraged by the steady growth at CNB Financial, with earnings per share up 5.1% on average over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. It looks like the CNB Financial dividends are largely the same as they were 10 years ago.

To Sum It Up

Should investors buy CNB Financial for the upcoming dividend? CNB Financial has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. We think this is a pretty attractive combination, and would be interested in investigating CNB Financial more closely.

In light of that, while CNB Financial has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 2 warning signs for CNB Financial that you should be aware of before investing in their shares.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.