In This Article:
The board of Camden National Corporation (NASDAQ:CAC) has announced that it will be paying its dividend of $0.42 on the 28th of April, an increased payment from last year's comparable dividend. This will take the annual payment to 4.8% 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 Forecasted To Be Well Covered By Earnings
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Having distributed dividends for at least 10 years, Camden National has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 39%, which means that Camden National would be able to pay its last dividend without pressure on the balance sheet.
Over the next 3 years, EPS is forecast to fall by 3.5%. Fortunately, analysts forecast the future payout ratio to be 44% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.
Camden National Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was $0.667 in 2013, and the most recent fiscal year payment was $1.68. This means that it has been growing its distributions at 9.7% per annum over that time. 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
The company's investors will be pleased to have been receiving dividend income for some time. Camden National has impressed us by growing EPS at 18% 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.
We Really Like Camden National's Dividend
Overall, a dividend increase is always good, and we think that Camden National is a strong income stock thanks to its track record and growing earnings. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for Camden National that investors should know about before committing capital to this stock. Is Camden National not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.