Yahoo Finance ACNB (NASDAQ:ACNB) Will Pay A Larger Dividend Than Last Year At $0.32
ACNB Corporation (NASDAQ:ACNB) will increase its dividend from last year's comparable payment on the 14th of June to $0.32. The payment will take the dividend yield to 3.5%, which is in line with the average for the industry.
See our latest analysis for ACNB
ACNB's Payment Expected To Have Solid Earnings Coverage
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
ACNB has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on ACNB's last earnings report, the payout ratio is at a decent 34%, meaning that the company is able to pay out its dividend with a bit of room to spare.
The next year is set to see EPS grow by 1.2%. If the dividend continues along recent trends, we estimate the future payout ratio will be 36%, which is in the range that makes us comfortable with the sustainability of the dividend.
ACNB Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2014, the annual payment back then was $0.76, compared to the most recent full-year payment of $1.20. This means that it has been growing its distributions at 4.7% per annum over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.
The Dividend's Growth Prospects Are Limited
The company's investors will be pleased to have been receiving dividend income for some time. ACNB hasn't seen much change in its earnings per share over the last five years. While growth may be thin on the ground, ACNB could always pay out a higher proportion of earnings to increase shareholder returns.
We Really Like ACNB's Dividend
Overall, a dividend increase is always good, and we think that ACNB is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in ACNB stock. 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.
