Camden National (NASDAQ:CAC) Is Paying Out A Dividend Of $0.42

Camden National Corporation (NASDAQ:CAC) has announced that it will pay a dividend of $0.42 per share on the 31st of January. This means that the annual payment will be 3.9% of the current stock price, which is in line with the average for the industry.

Check out our latest analysis for Camden National

Solid dividend yields are great, but they only really help us if the payment is sustainable.

Camden National has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company’s payout ratio shows 52%, which means that Camden National would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, EPS is forecast to rise by 65.5% over the next 3 years. Analysts forecast the future payout ratio could be 37% over the same time horizon, which is a number we think the company can maintain.

Even over a long history of paying dividends, the company’s distributions have been remarkably stable. Since 2014, the annual payment back then was $0.72, compared to the most recent full-year payment of $1.68. This means that it has been growing its distributions at 8.8% per annum over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The company’s investors will be pleased to have been receiving dividend income for some time. However, initial appearances might be deceiving. Over the past five years, it looks as though Camden National’s EPS has declined at around 2.3% a year. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits. It’s not all bad news though, as the earnings are predicted to rise over the next 12 months – we would just be a bit cautious until this can turn into a longer term trend.

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

It’s important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Given that earnings are not growing, the dividend does not look nearly so attractive. Very few businesses see earnings consistently shrink year after year in perpetuity though, and so it might be worth seeing what the 4 analysts we track are forecasting for the future. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.