Investors interested in purchasing CNB Financial Corporation (NASDAQ:CCNE) for its dividend should act quickly, as the stock is approaching its ex-dividend date. This date is one business day prior to the company’s record date, which is when the firm identifies shareholders eligible to receive a dividend. The ex-dividend date is crucial because any stock transaction must settle before the record date to qualify for the dividend. Therefore, to qualify for CNB Financial’s dividend, shares should be acquired before February 28th, with payment scheduled for March 14th.
The upcoming dividend payment is set at US$0.18 per share. Over the past year, the company distributed a total of US$0.72 to its shareholders. This previous distribution means that CNB Financial boasts a trailing yield of 2.9%, calculated against the current share price of US$25.23. Dividends serve as a vital income source for many shareholders, but the company’s financial health is essential for sustaining these dividends. Thus, it’s important to evaluate whether the dividend payments are well-supported and if the company’s earnings are on the rise.
Explore our latest analysis for CNB Financial
Dividends are typically funded from company earnings, so a firm that distributes more than it earns may be at risk of reducing its dividend. Hence, it’s encouraging to observe that CNB Financial maintains a conservative payout ratio of just 30% of its earnings.
When a company pays out less in dividends than what it has earned, it generally indicates that the dividend is manageable. A lower payout percentage provides a buffer for the dividend, particularly if the company experiences a downturn.
Click here to view the company’s payout ratio, along with analyst projections regarding future dividends.
While companies that do not show earnings growth can still hold value, it becomes increasingly essential to evaluate the sustainability of their dividends if growth appears uncertain. Should earnings fall and the company be compelled to cut its dividend, investors could see their investments significantly diminish. This is why we remain cautious about CNB Financial’s stagnant earnings over the past five years. While it’s certainly better than a sharp decrease, the most reliable dividend stocks typically exhibit substantial long-term earnings growth.
A further method of evaluating a company’s dividend viability is by analyzing its historical dividend growth rate. CNB Financial has managed an average annual increase of 0.9% in its dividends based on the past decade of payout data.
