Management Board Camden National Foundation (NASDAQ:CAC) announced that it will increase its dividend on January 31 to $0.40. That makes the dividend yield 2.9%, which is above the industry average.
See our latest analysis on Camden National
Camden National Payments Has Strong Earning Cover
Great dividend yields are good, but that doesn’t matter much if the payments can’t be sustained. Prior to this announcement, Camden National was easily earning enough to cover profits. This means that most of what a business earns is used to help it grow.
Looking ahead, earnings per share are expected to decline by 11.3% over the next year. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 39%, which is comfortable for the company to continue into the future.
Camden National has a proven track record
The company has an extended history of paying fixed dividends. Since 2012, the dividend has increased from $0.67 to $1.60. This works out to be a compound annual growth rate (CAGR) of approximately 9.1% per year during that time. The dividend has been growing very well for a number of years, giving its shareholders some good income in their investment portfolios.
Dividend likely to grow
Investors can be attracted to stocks based on the quality of the payment history. It’s encouraging to see Camden National has increased its earnings per share by 19% annually over the past five years. The low payout ratio and decent growth indicate that the company is re-investing well, and also has plenty of room to increase profits over time.
We really love Camden National earnings
Overall, increasing earnings is always a good thing, and we believe Camden National is a solid income asset with its proven track record and growing earnings. The company generates a lot of liquidity and profits cover the distributions quite easily. If profits fall over the next 12 months, profits may be reduced a bit, but we don’t think that will cause much problems in the long run. All of these factors into consideration, we believe have strong potential as a dividend stock.
Investors generally tend to prefer companies that have a firm and stable dividend policy as opposed to those that have an irregular system. At the same time, there are other factors that readers should be aware of before injecting capital into stocks. For example, we set 1 warning sign for Camden National Which you should be aware of before investing. If you are a dividend investor, you may also want to take a look at A curated list of high performance dividend stocks.
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