The board of CB Financial Services, Inc. (NASDAQ:CBFV) has announced that it will pay a dividend of $0.25 per share on the 28th of February. This means the dividend yield will be fairly typical at 3.2%.

Check out our latest analysis for CB Financial Services

CB Financial Services' Payment Expected To Have Solid Earnings Coverage

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Having distributed dividends for at least 10 years, CB Financial Services has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but CB Financial Services' payout ratio of 41% is a good sign as this means that earnings decently cover dividends.

Over the next 3 years, EPS is forecast to fall by 20.2%. Fortunately, analysts forecast the future payout ratio to be 49% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.

CB Financial Services 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 $0.84 in 2015, and the most recent fiscal year payment was $1.00. This means that it has been growing its distributions at 1.8% per annum over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

The Dividend's Growth Prospects Are Limited

Investors could be attracted to the stock based on the quality of its payment history. Unfortunately things aren't as good as they seem. Unfortunately, CB Financial Services' earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year.

Our Thoughts On CB Financial Services' Dividend

In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. With shrinking earnings, the company may see some issues maintaining the dividend even though they look pretty sustainable for now. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for CB Financial Services that investors should know about before committing capital to this stock. Is CB Financial Services not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.