If you are interested in cashing in on Chemung Financial Corporation’s (NASDAQ:CHMG) upcoming dividend of $0.26 per share, you only have 3 days left to buy the shares before its ex-dividend date, 18 December 2017, in time for dividends payable on the 02 January 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine Chemung Financial’s latest financial data to analyse its dividend characteristics. See our latest analysis for Chemung Financial

5 questions to ask before buying a dividend stock

Whenever I am looking at a potential dividend stock investment, I always check these five metrics:

• Does it pay an annual yield higher than 75% of dividend payers?

• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• Has the amount of dividend per share grown over the past?

• Does earnings amply cover its dividend payments?

• Will it have the ability to keep paying its dividends going forward?

How does Chemung Financial fare?

The company currently pays out 39.72% of its earnings as a dividend, which means that the dividend is covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. CHMG has increased its DPS from $0.96 to $1.04 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes CHMG a true dividend rockstar. Compared to its peers, Chemung Financial generates a yield of 1.98%, which is on the low-side for banks stocks.

What this means for you:

Are you a shareholder? If Chemung Financial is in your portfolio for cash-generating reasons, there may be better alternatives out there. It may be beneficial exploring other income stocks as alternatives to Chemung Financial or even look at high-growth stocks to complement your steady income stocks. I recommend continuing your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.

Are you a potential investor? If you are building an income portfolio, then Chemung Financial is a complicated choice since it has some positive aspects as well as negative ones. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. As always, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Check our latest free fundmental analysis to explore other aspects of Chemung Financial.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.