Yahoo Finance Farmers National Banc (NASDAQ:FMNB) Has Affirmed Its Dividend Of $0.17
The board of Farmers National Banc Corp. (NASDAQ:FMNB) has announced that it will pay a dividend of $0.17 per share on the 28th of June. This makes the dividend yield 5.5%, which will augment investor returns quite nicely.
Check out our latest analysis for Farmers National Banc
Farmers National Banc's Payment Expected To Have Solid Earnings Coverage
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.
Farmers National Banc has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Farmers National Banc's payout ratio of 47% is a good sign as this means that earnings decently cover dividends.
Over the next year, EPS is forecast to fall by 6.2%. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 60%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
Farmers National Banc Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from $0.12 total annually to $0.68. This means that it has been growing its distributions at 19% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
The Dividend's Growth Prospects Are Limited
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, Farmers National Banc has only grown its earnings per share at 3.7% per annum over the past five years. Growth of 3.7% may indicate that the company has limited investment opportunity so it is returning its earnings to shareholders instead. This isn't bad in itself, but unless earnings growth pick up we wouldn't expect dividends to grow either.
Farmers National Banc Looks Like A Great Dividend Stock
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. 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. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for Farmers National Banc that investors need to be conscious of moving forward. Is Farmers National Banc not quite the opportunity you were looking for? Why not check out our selection of top 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.
