There is a lot to be liked about Camden National Corporation (NASDAQ:CAC) as an income stock, over the past 10 years it has returned an average of 3.00% per year. The company pays out a dividend yield of 2.33% to shareholders, making it a relatively attractive dividend stock. Let’s dig deeper into whether Camden National should have a place in your portfolio. View our latest analysis for Camden National
How I analyze a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has it increased its dividend per share amount over the past?
- Does earnings amply cover its dividend payments?
- Will it have the ability to keep paying its dividends going forward?
How does Camden National fare?
The current payout ratio for the stock is 33.65%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect CAC’s payout to fall to 29.83% of its earnings, which leads to a dividend yield of around 2.26%. However, EPS should increase to $3.05, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. CAC has increased its DPS from $0.64 to $1 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes CAC a true dividend rockstar. In terms of its peers, Camden National produces a yield of 2.33%, which is on the low-side for banks stocks.
Considering the dividend attributes we analyzed above, Camden National is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. 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. I’ve put together three pertinent aspects you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for CAC’s future growth? Take a look at our free research report of analyst consensus for CAC’s outlook.
2. Valuation: What is CAC 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 CAC is currently mispriced by the market.
3. 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 pass 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.