Yahoo Finance CB Financial Services (NASDAQ:CBFV) Is Due To Pay A Dividend Of $0.25
CB Financial Services, Inc.'s (NASDAQ:CBFV) investors are due to receive a payment of $0.25 per share on 31st of May. Based on this payment, the dividend yield on the company's stock will be 4.5%, which is an attractive boost to shareholder returns.
Check out our latest analysis for CB Financial Services
CB Financial Services' Dividend Forecasted To Be Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
Having distributed dividends for at least 10 years, CB Financial Services has a long history of paying out a part of its earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 23% also shows that CB Financial Services is able to comfortably pay dividends.
EPS is set to fall by 73.8% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 46% over the same time period, which is in a pretty comfortable range.
CB Financial Services Has A Solid Track Record
The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.84 in 2014, and the most recent fiscal year payment was $1.00. This works out to be a compound annual growth rate (CAGR) of approximately 1.8% a year over that time. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that CB Financial Services has grown earnings per share at 25% per year over the past five years. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.
In Summary
Overall, a consistent dividend is a good thing, and we think that CB Financial Services has the ability to continue this into the future. The company is paying out quite a high portion of earnings, but with those earnings growing quickly, this might resolve itself eventually. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for CB Financial Services that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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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.
