Camden National (NASDAQ:CAC) Is Increasing Its Dividend To US$0.40
Camden National Corporation’s (NASDAQ:CAC) dividend will be increasing to US$0.40 on 31st of January. This will take the annual payment to 2.9% of the stock price, which is above what most companies in the industry pay.
View our latest analysis for Camden National
Camden National’s Dividend Is Well Covered By Earnings
Impressive dividend yields are good, but this doesn’t matter much if the payments can’t be sustained. However, Camden National’s earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
Looking forward, earnings per share is forecast to fall by 11.3% over the next year. If the dividend continues along recent trends, we estimate the payout ratio could be 39%, which we consider to be quite comfortable, with most of the company’s earnings left over to grow the business in the future.
Camden National Has A Solid Track Record
Even over a long history of paying dividends, the company’s distributions have been remarkably stable. The dividend has gone from US$0.67 in 2012 to the most recent annual payment of US$1.60. This implies that the company grew its distributions at a yearly rate of about 9.1% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Camden National has grown earnings per share at 19% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Camden National’s prospects of growing its dividend payments in the future.
Camden National Looks Like A Great Dividend Stock
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The earnings easily cover the company’s distributions, and the company is generating plenty of cash. We should point out that the earnings are expected to fall over the next 12 months, which won’t be a problem if this doesn’t become a trend, but could cause some turbulence in the next year. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we’ve identified 1 warning sign for Camden National that investors need to be conscious of moving forward. We have also put together a list of global stocks with a solid dividend.
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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.