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Why CB Financial Services (CBFV) is a Great Dividend Stock Right Now

Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

CB Financial Services in Focus

CB Financial Services (CBFV) is headquartered in Carmichaels, and is in the Finance sector. The stock has seen a price change of -12.53% since the start of the year. The holding company for Pennsylvania-based Community Bank is currently shelling out a dividend of $0.25 per share, with a dividend yield of 5.33%. This compares to the Banks - Northeast industry's yield of 3.28% and the S&P 500's yield of 1.75%.

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Taking a look at the company's dividend growth, its current annualized dividend of $1 is up 4.2% from last year. Over the last 5 years, CB Financial Services has increased its dividend 2 times on a year-over-year basis for an average annual increase of 1.38%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. CB Financial Services's current payout ratio is 43%. This means it paid out 43% of its trailing 12-month EPS as dividend.

CBFV is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $2.95 per share, with earnings expected to increase 37.21% from the year ago period.

Bottom Line

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that CBFV is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).

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CB Financial Services, Inc. (CBFV) : Free Stock Analysis Report

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Zacks Investment Research