There’s a lot to love about CB Financial Services’ (NASDAQ:CBFV) upcoming $0.24 dividend

0

Readers hoping to buy CB Financial Services, Inc. (NASDAQ:CBFV) for its dividend will have to come shortly, as the stock is set to trade ex-dividend. The ex-dividend date is one business day before a company’s record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important because the settlement process involves two full business days. So if you miss this date, you will not be on the company’s books as of the record date. As a result, CB Financial Services investors who buy the stock on or after November 17 will not receive the dividend, which will be paid on November 30.

The company’s next dividend payment will be $0.24 per share. Last year, in total, the company distributed US$0.96 to shareholders. Last year’s total dividend payout shows that CB Financial Services has a 4.4% yield on the current stock price of $22.05. Dividends contribute greatly to investment returns for long-term holders, but only if the dividend continues to be paid. That’s why we always have to check if the dividend payouts seem sustainable and if the business is growing.

Our analysis indicates that CBFV is potentially undervalued!

Dividends are usually paid out of company profits, so if a company pays out more than it has earned, its dividend is usually at risk of being reduced. That’s why it’s good to see CB Financial Services paying out a modest 35% of its profits.

When a company has paid out less in dividends than it has earned in profits, this generally suggests that its dividend is affordable. The lower the percentage of its profits it pays out, the greater the margin of safety for the dividend if the company goes into a recession.

Click here to see the company’s payout ratio, as well as analysts’ estimates of its future dividends.

NasdaqGM: Historic CBFV Dividend November 12, 2022

Have earnings and dividends increased?

Companies with strong growth prospects are generally the best dividend payers because it is easier to increase dividends when earnings per share improve. Investors love dividends, so if earnings fall and the dividend is cut, expect a stock to sell heavily at the same time. That’s why it’s a relief to see CB Financial Services’ earnings per share increasing by 8.2% per year over the past five years.

Most investors primarily gauge a company’s dividend prospects by checking the historical rate of dividend growth. Over the past eight years, CB Financial Services has increased its dividend by approximately 1.7% per year on average.

To sum up

From a dividend perspective, should investors buy or avoid CB Financial Services? It has increased its earnings per share somewhat in recent years, although it reinvests more than half of its profits in the business, which could suggest that some growth projects have not yet come to fruition. In summary, CB Financial Services looks promising as a dividend-paying stock, and we suggest you take a closer look.

In light of this, although CB Financial Services has an attractive dividend, it is worth knowing the risks associated with this stock. To help you, we found 1 warning sign for CB Financial Services which you should be aware of before investing in their stocks.

As a general rule, we don’t recommend simply buying the first dividend-paying stock you see. Here is a curated list of attractive stocks that are strong dividend payers.

Valuation is complex, but we help make it simple.

Find out if CB Financial Services is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

See the free analysis

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Share.

About Author

Comments are closed.