Camden National (NASDAQ:CAC) Has Affirmed Its Dividend Of $0.42

Simply Wall St · 04/14 12:52

Camden National Corporation's (NASDAQ:CAC) investors are due to receive a payment of $0.42 per share on 30th of April. The dividend yield will be 4.6% based on this payment which is still above the industry average.

We've discovered 1 warning sign about Camden National. View them for free.

Camden National's Dividend Forecasted To Be Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much.

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 46%, 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 expand by 58.8%. Analysts estimate the future payout ratio will be 35% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

historic-dividend
NasdaqGS:CAC Historic Dividend April 14th 2025

Check out our latest analysis for Camden National

Camden National Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.72 in 2015 to the most recent total annual payment of $1.68. This works out to be a compound annual growth rate (CAGR) of approximately 8.8% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

The Dividend's Growth Prospects Are Limited

Investors could be attracted to the stock based on the quality of its payment history. However, things aren't all that rosy. In the last five years, Camden National's earnings per share has shrunk at approximately 3.2% per annum. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed. Earnings are forecast to grow over the next 12 months and if that happens we could still be a little bit cautious until it becomes a pattern.

We should note that Camden National has issued stock equal to 15% of shares outstanding. Trying to grow the dividend when issuing new shares reminds us of the ancient Greek tale of Sisyphus - perpetually pushing a boulder uphill. Companies that consistently issue new shares are often suboptimal from a dividend perspective.

Our Thoughts On Camden National's Dividend

Overall, we think Camden National is a solid choice as a dividend stock, even though the dividend wasn't raised this year. The earnings coverage is acceptable for now, but with earnings on the decline we would definitely keep an eye on the payout ratio. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Camden National that investors should take into consideration. Is Camden National not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.