Updated 3/5/25
Dividend investors are always looking for reliable stocks that provide steady income while maintaining financial strength. ACNB Corporation (ACNB) is a regional bank that has caught the attention of income-focused investors due to its consistent dividend payments and solid financial performance. Let’s dive into the key factors that make ACNB an interesting choice for those seeking stable dividends.
Key Dividend Metrics
✅ Dividend Yield: 3.05% (Forward)
✅ Dividend Growth: Maintains steady payouts
✅ Payout Ratio: 33.78%, indicating sustainability
✅ 5-Year Average Dividend Yield: 3.39%, consistent over time
✅ Ex-Dividend Date: February 28, 2025
✅ Dividend Payment Date: March 14, 2025
✅ Return on Equity (ROE): 10.97%, reflecting solid profitability
✅ Revenue Growth (YoY): 20.3%, showing positive momentum
❌ Debt Levels: $273.92 million in total debt, something to watch
❌ Dividend Growth Rate: Not a strong history of aggressive increases
Dividend Strength & Sustainability
ACNB offers a forward dividend yield of 3.05%, which is slightly below its five-year average of 3.39%. This suggests that while the yield is attractive, it’s in line with historical levels, making it a relatively stable income source. The company’s payout ratio sits at a comfortable 33.78%, meaning it retains enough of its earnings for reinvestment while still rewarding shareholders. Banks with payout ratios under 50% are generally in a good position to maintain their dividend over the long run.
One of the standout aspects of ACNB is its ability to generate strong earnings. With a return on equity of nearly 11%, the company is using shareholders’ money efficiently to generate profits. At the same time, its profit margin sits at 28.66%, and operating margins are even higher at 36.66%, showing that it has solid control over its expenses and revenue generation.
For dividend investors, this level of profitability is encouraging because it means the company has the financial flexibility to keep paying dividends, even during economic downturns. While free cash flow data isn’t available, the bank’s earnings growth of 61% year-over-year suggests that its business is expanding, which further supports the sustainability of its dividend.
Chart Analysis
The chart of ACNB Corporation shows an interesting mix of trends, with the stock experiencing a strong run-up in the second half of last year, followed by a period of consolidation and pullback.
The stock price initially moved sideways through the early months, struggling to gain momentum. Around mid-year, a breakout occurred, accompanied by a noticeable increase in volume. This shift suggested strong buying interest, pushing the stock into an uptrend. The rally accelerated into the final months of the year, reaching a sharp peak before retracing.
Two moving averages are present: a shorter-term moving average (orange line) and a longer-term moving average (blue line). The price surged well above both moving averages at its peak, indicating strong bullish momentum. However, as the stock declined, it fell back toward these key levels, where it appears to be consolidating. Recently, the stock has crossed back above one of the moving averages, which may indicate a shift in sentiment.
Volume activity has been notable throughout this cycle. During the initial breakout, volume spiked higher, confirming the move. As the price pulled back, volume remained elevated at certain points, particularly during sharper drops. The most recent trading sessions have seen moderate volume, suggesting that the market is still assessing the next directional move.
The Relative Strength Index (RSI) at the bottom of the chart provides insight into momentum. During the peak, RSI reached overbought levels, signaling that the stock was running hot. Since then, RSI has pulled back, aligning with the price correction. Recently, RSI has moved back upward but remains in a neutral zone, showing neither extreme buying nor selling pressure.
The past five candles on the chart reveal some choppiness. There have been multiple instances of long wicks, suggesting uncertainty and the presence of both buyers and sellers competing for control. A recent move higher was met with selling pressure, as indicated by an upper wick rejecting higher prices. At the same time, downside wicks have appeared, showing some level of demand supporting the stock.
This setup suggests that ACNB is currently in a key technical phase where the market is deciding its next move.
Earnings Report Summary
ACNB Corporation wrapped up 2024 with a strong financial performance, showing steady growth and resilience despite some challenges along the way.
Fourth Quarter 2024 Highlights
The company posted a net income of $6.6 million for the fourth quarter, which translates to $0.77 per share. That’s a solid 61% jump compared to the same time last year, though it did dip slightly—about 8.5%—from the previous quarter. Net interest income ticked up to $21.1 million, a slight increase from Q3, thanks to a small improvement in net interest margin, which landed at 3.81%.
On the other hand, noninterest income dropped to $5.8 million, mostly due to a seasonal slowdown in insurance and wealth management revenue. Expenses remained in check, with noninterest costs creeping up just under 1%, driven by equipment and other operational costs.
Full-Year 2024 Performance
Looking at the bigger picture, ACNB closed the year with $31.8 million in net income, or $3.73 per share. That’s a small gain over the previous year, but still a sign of stability. Net interest income for the year came in at $83.6 million, down slightly due to higher funding costs and more reliance on long-term borrowing.
On a brighter note, noninterest income saw a boost, climbing 4.1% for the year. That was driven by solid gains in wealth management, insurance commissions, and mortgage loan sales. Meanwhile, expenses rose 7% as the company dealt with merger-related costs and higher salaries.
Loan Growth and Asset Quality
Loans grew by 3.4% year-over-year, bringing total outstanding loans to $1.68 billion. Most of this growth came from the commercial real estate segment, which saw nearly an 8% increase. However, there was a slight rise in non-performing loans, moving to 0.40% of total loans from 0.26% last year. The reason? A long-standing commercial healthcare client ran into financial trouble, though overall charge-offs remained minimal.
Deposits and Borrowings
Deposits totaled $1.79 billion at year-end, reflecting a 3.7% dip as customers sought better returns elsewhere due to rising interest rates. To counterbalance this, the company leaned more on borrowings, which increased by 7.5% over the year.
Stockholder Equity and Book Value
Stockholders’ equity climbed to $303.3 million, up from $277.5 million in the prior year. The tangible book value per share also increased, moving from $26.44 to $29.51, showing a steady improvement in the company’s overall financial position.
While ACNB faced some hurdles, it managed to grow its bottom line and keep asset quality in check, setting up a stable foundation moving forward.
Analyst Ratings
Upgrades:
On March 3, 2025, Piper Sandler upgraded ACNB from a “Neutral” rating to “Overweight,” raising the price target from $37 to $50. This upgrade was driven by the company’s strong financial performance and growth prospects.
Earlier, on July 31, 2024, Hovde Group upgraded ACNB from “Market Perform” to “Outperform,” setting a price target of $45. The firm cited improved operational efficiency and a robust balance sheet as key factors for the upgrade.
Downgrades:
On December 18, 2023, Hovde Group downgraded ACNB from “Outperform” to “Market Perform,” adjusting the price target from $40 to $47. The downgrade was attributed to valuation concerns following a significant increase in the stock price, suggesting limited upside potential at that time.
Consensus Price Target:
The average one-year price target for ACNB is approximately $45.56, with forecasts ranging from a low of $37.37 to a high of $55.65. This consensus reflects analysts’ expectations of the company’s performance over the next 12 months.
These varied analyst perspectives highlight the importance of considering both the company’s strong financial health and market valuation when evaluating investment decisions.
Valuation & Market Position
Looking at valuation, ACNB trades at a price-to-earnings (P/E) ratio of 11.23 on a trailing basis, with a forward P/E of 9.75. This suggests the stock is relatively cheap, particularly compared to broader market benchmarks. Regional banks often trade at lower multiples, but this still makes ACNB an appealing value pick for income investors.
The price-to-book (P/B) ratio stands at 1.46, which is higher than its recent quarterly levels. This means that investors are currently paying a slight premium for ACNB’s book value compared to previous quarters. While this isn’t necessarily a negative sign, it does indicate that the stock may not be as undervalued as it was in the past.
With a beta of 0.64, ACNB is less volatile than the overall market. For income investors, this lower volatility can be a major advantage, as it helps maintain portfolio stability. The stock has traded between $30.24 and $50.72 over the past year, and with its current price sitting at $41.47, it’s positioned somewhere in the middle of that range.
Balance Sheet & Risk Considerations
One area that investors should keep an eye on is ACNB’s debt level. The company has $273.92 million in total debt, which, while manageable, is still worth monitoring. In the banking sector, debt levels can have a significant impact on profitability, especially in a rising interest rate environment.
Ownership-wise, institutional investors hold about 30.2% of the company’s shares, while insiders own 3.86%. This level of insider ownership suggests that management has some skin in the game, aligning their interests with those of shareholders. Meanwhile, short interest in the stock is minimal, with only 0.57% of shares outstanding currently sold short. This indicates that there is no major bearish sentiment surrounding the stock.
Final Thoughts for Dividend Investors
ACNB offers a compelling case for dividend investors seeking a steady income stream. With a moderate 3.05% dividend yield, a conservative payout ratio, and strong earnings growth, it appears well-positioned to maintain its dividend payments. The company’s profitability metrics further reinforce its ability to sustain these payouts, while its low volatility makes it an attractive option for conservative investors.
For those focused on income, ACNB checks many of the right boxes: it has a reliable dividend history, strong earnings, and a payout ratio that allows room for growth. However, its debt load and relatively flat dividend growth over the years are aspects to keep in mind. While the yield is appealing, dividend growth investors may want to watch for signs of more aggressive increases in the future.
Overall, ACNB presents a solid option for investors looking to build a dependable dividend portfolio.
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