LCNB (NASDAQ:LCNB) Is Due To Pay A Dividend Of $0.22
LCNB Corp. (NASDAQ:LCNB) will pay a $0.22 dividend on December 15, yielding 5.6%. The dividend is well-covered by earnings, with a payout ratio of 53%. LCNB has a stable dividend history, growing distributions at 3.2% annually since 2015. However, earnings per share have only grown 2.2% annually over the past five years, indicating limited dividend growth prospects. Despite this, LCNB remains a solid dividend stock with consistent payouts and a sustainable dividend policy.
LCNB Corp. (NASDAQ:LCNB) will pay a dividend of $0.22 on the 15th of December. This makes the dividend yield 5.6%, which will augment investor returns quite nicely.
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LCNB's Dividend Forecasted To Be Well Covered By Earnings
If the payments aren't sustainable, a high yield for a few years won't matter that much.
LCNB has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 53%, which means that LCNB would be able to pay its last dividend without pressure on the balance sheet.
Looking forward, EPS is forecast to rise by 6.1% over the next 3 years. Analysts estimate the future payout ratio will be 50% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
View our latest analysis for LCNB
LCNB Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2015, the dividend has gone from $0.64 total annually to $0.88. This means that it has been growing its distributions at 3.2% per annum 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's Growth Prospects Are Limited
The company's investors will be pleased to have been receiving dividend income for some time. However, LCNB has only grown its earnings per share at 2.2% per annum over the past five years. LCNB is struggling to find viable investments, so it is returning more to shareholders. While this isn't necessarily a negative, it definitely signals that dividend growth could be constrained in the future unless earnings start to pick up again.
LCNB Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.
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. See if management have their own wealth at stake, by checking insider shareholdings in LCNB stock. Is LCNB not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
