Updated 3/6/25
Chesapeake Financial Shares, Inc. (CPKF) is a small but steady regional bank that’s been quietly rewarding its shareholders for years. Headquartered in Virginia, this community bank operates through Chesapeake Bank and Chesapeake Wealth Management, offering a mix of traditional banking services and specialty financing.
For investors looking for a reliable dividend stock outside the big-name banks, Chesapeake Financial offers an interesting option. It doesn’t have the flash of major financial institutions, but its steady performance and commitment to returning capital to shareholders make it worth a closer look.
Key Dividend Metrics
💰 Dividend Yield: 3.46%
📈 5-Year Average Dividend Yield: 2.64%
💵 Annual Dividend Per Share: $0.64
🔄 Dividend Growth: Consistently increasing over time
🛡 Payout Ratio: 31.47% (well within a sustainable range)
📅 Next Dividend Payment Date: March 15, 2025
📆 Ex-Dividend Date: February 28, 2025
Dividend Overview
Chesapeake Financial’s current dividend yield sits at 3.46%, which is a healthy premium over its five-year average of 2.64%. This suggests that investors today are getting a slightly better yield than they would have in the past, possibly due to slower stock price appreciation or increased payouts.
With a payout ratio of just over 31%, the company isn’t overextending itself when it comes to paying dividends. That’s an encouraging sign, as it means there’s still room for dividend growth without putting too much pressure on the company’s finances.
For investors who prioritize consistency, Chesapeake Financial has been delivering. Dividend stability is a key factor in long-term investing, and this company has shown a commitment to rewarding shareholders year after year.
Dividend Growth and Safety
One of the standout aspects of Chesapeake Financial’s dividend is its steady upward trend. The company has a track record of raising dividends, which is a strong indicator that management is confident in its future earnings potential.
With earnings growth of 235.8% year-over-year and a conservative payout ratio, there’s plenty of breathing room for additional increases. Unlike some companies that push the limits with high payout ratios, Chesapeake Financial keeps it balanced, ensuring that dividends remain sustainable even in tough economic conditions.
Another positive factor is the company’s low stock volatility. With a beta of 0.50, Chesapeake Financial’s stock moves less than the broader market. For dividend investors, that’s a plus—it means less risk of dramatic price swings that could threaten long-term returns.
Chart Analysis
Price Movement and Trends
The stock has been in a generally upward trend since mid-2024, although recent price action suggests some sideways movement. The price is currently at $18.50, which is slightly below the 50-day moving average (orange line) but still above the 200-day moving average (blue line). This setup indicates some short-term weakness, but the longer-term trend remains intact.
The 200-day moving average is trending upward, suggesting that the overall bullish structure is still in place. However, the 50-day moving average is flattening and starting to turn slightly downward, which could indicate the beginning of a cooling-off period or consolidation.
Volume Activity
Volume remains relatively low, with 1,583 shares traded on the last session. There were notable volume spikes in June, August, and February, which correspond to larger price swings. These volume bursts likely represent institutional activity or significant buying and selling pressure.
Recently, volume has tapered off, which suggests that the current price movement lacks conviction. A return of higher volume along with a breakout could confirm the next major move in either direction.
Relative Strength Index (RSI)
The RSI indicator at the bottom of the chart shows that the stock was overbought in mid-2024, leading to some price corrections. More recently, RSI has been hovering in the neutral zone, neither overbought nor oversold.
However, the RSI has dropped recently, suggesting some weakness in momentum. If it moves closer to oversold territory, it could indicate a buying opportunity. On the flip side, if the RSI stays weak without rebounding, it might confirm a lack of buying interest.
Moving Average Crossovers
The 50-day moving average was acting as support in late 2024, but now that the price has fallen below it, it could turn into a resistance level. If the 50-day moving average crosses below the 200-day moving average, that would be considered a bearish signal. Right now, that hasn’t happened, but it’s something to watch closely.
A decisive move back above the 50-day moving average with strong volume could suggest renewed buying interest and a continuation of the longer-term trend. Conversely, if the price breaks below the 200-day moving average, it could signal further downside risk.
Support and Resistance Levels
The $19.50 level appears to be a key resistance zone, as the stock has struggled to hold above that area multiple times. If it breaks through convincingly, that could open the door for further upside.
On the downside, the $18.00 area has provided support, with the 200-day moving average reinforcing it. A break below this zone could trigger additional selling pressure.
Recent Candlestick Action
The last five trading sessions have shown relatively small-bodied candles, meaning there hasn’t been a strong push in either direction. The lack of wicks on the most recent candle suggests an absence of aggressive buying or selling pressure at this level.
A series of tight-range candles like this often indicates indecision, which means the next significant move could be more volatile once the market makes up its mind. If volume picks up, expect a clearer directional move to follow.
Analyst Ratings
Chesapeake Financial Shares, Inc. (CPKF) has recently attracted attention from analysts, resulting in both upgrades and downgrades. The consensus price target is $24.50, indicating potential growth from the current price of $18.50.
Upgrades Analysts who have upgraded CPKF highlight the company’s strong financial performance. The bank’s recent earnings reports show consistent growth, with net income and return on equity metrics reflecting operational efficiency. Additionally, CPKF’s conservative lending practices and strong asset quality have positioned it well in the current economic climate, prompting a more favorable outlook from some analysts.
Downgrades Conversely, some analysts have issued downgrades for CPKF, citing concerns over its limited market capitalization and geographic concentration. As a smaller regional bank, CPKF’s growth prospects may be constrained compared to larger, more diversified financial institutions. Furthermore, the bank’s exposure to specific local economic conditions could pose risks, leading to a more cautious stance among certain analysts.
Overall, while CPKF has demonstrated solid financial health, opinions among analysts vary, reflecting a balance of optimism regarding its performance and caution due to its size and market focus.
Earnings Report Summary
Chesapeake Financial Shares, Inc. (CPKF) just wrapped up a solid year, posting strong financial results for 2024. The numbers show steady growth, a commitment to shareholders, and a well-managed balance sheet, all of which paint a positive picture for the bank’s future.
Earnings and Profitability
The company’s net income came in at $11.4 million, up nearly 13% from the previous year. That’s a healthy boost, and it translated into an increase in earnings per share, which rose from $2.15 in 2023 to $2.42 in 2024. This kind of steady earnings growth suggests the bank is managing its operations efficiently and finding ways to increase profitability without taking on excessive risk.
Asset Growth
Chesapeake Financial saw its total assets grow to $1.52 billion, a nearly 4% increase from the year before. While that may not be a massive jump, it’s a sign of stability and steady expansion. Growth at this pace suggests the company is focusing on sustainable, long-term performance rather than chasing aggressive, high-risk strategies.
Loan Portfolio and Asset Quality
Nonperforming assets—essentially loans that aren’t being paid back on time—ticked up slightly from 0.255% in 2023 to 0.328% in 2024. That’s still a very low percentage, indicating that the bank’s loan portfolio remains in good shape. A small increase like this isn’t alarming, but it’s something investors may want to keep an eye on in the coming quarters.
Dividend News
Longtime Chesapeake Financial shareholders have something to smile about—the company announced another quarterly dividend of $0.16 per share, set for March 2025. That marks the 32nd consecutive year of dividend increases, which is a testament to the company’s commitment to rewarding investors. For those focused on reliable income, this is a strong selling point.
Business Operations and Recognition
The bank benefited from a stable interest rate environment in 2024, which helped drive deposit growth and overall performance. Its subsidiaries, Chesapeake Payment Systems and Flexent, also had a strong year, contributing meaningfully to overall earnings.
On top of that, Chesapeake Financial continued to earn recognition in the industry, being named a “Top Performing Community Bank” for the 17th straight year. It also secured a spot on the “Best Banks to Work For” list for the 12th year in a row, a sign that it values both financial success and employee satisfaction.
Overall, Chesapeake Financial Shares had a strong 2024, showing steady earnings growth, responsible asset management, and a commitment to its shareholders. If it can maintain this momentum, it should remain a solid performer in the regional banking space.
Financial Health and Stability
A strong dividend is only as good as the company behind it, and Chesapeake Financial appears to be on solid footing. Its return on equity (ROE) of 10.87% shows that management is effectively utilizing shareholder funds, while a return on assets (ROA) of 0.76% is in line with what’s expected for a small regional bank.
One reassuring sign is its cash position. Chesapeake Financial has $36.9 million in cash on hand, exceeding its total debt of $31.26 million. Having more cash than debt is always a good indicator of financial flexibility, which is especially important for a bank navigating changing interest rate environments.
Revenue is also moving in the right direction, with a 14.7% increase year-over-year. This growth signals that the company is expanding, not just treading water.
Valuation and Stock Performance
From a valuation perspective, Chesapeake Financial looks like a bargain. It’s currently trading at a trailing price-to-earnings (P/E) ratio of 9.39, with a forward P/E of 7.55. That’s well below what you’d expect for a bank with steady financials, suggesting the stock may be undervalued.
The price-to-book (P/B) ratio of 0.78 is another signal that the stock could be trading below its true worth. When a company’s stock price is lower than its book value, it often indicates that investors are overlooking its fundamentals.
Looking at historical performance, the stock has traded between $16.45 and $19.50 over the past year, with a current price of $18.50. Its 200-day moving average is sitting at $18.47, meaning the stock has been fairly stable without major breakouts or drops.
Risks and Considerations
Even though Chesapeake Financial offers a strong dividend and solid fundamentals, there are still risks to keep in mind.
- Interest Rate Sensitivity – As a smaller bank, its earnings can be heavily influenced by interest rate fluctuations. A sudden drop in rates could compress margins and put pressure on profits.
- Limited Growth Potential – While it’s financially stable, Chesapeake Financial doesn’t have the same growth runway as larger banks. Investors should temper expectations for rapid expansion.
- Low Institutional Ownership – With only 3.66% of shares held by institutions, the stock lacks the analyst coverage and trading volume of bigger banks. This can sometimes lead to price inefficiencies or lower liquidity.
- Economic Factors – As with any bank, Chesapeake Financial is exposed to economic downturns. A slowdown in lending or an increase in loan defaults could weigh on earnings.
Final Thoughts
Chesapeake Financial Shares presents an interesting case for dividend investors looking for a smaller regional bank with a solid history of returning cash to shareholders. With a sustainable payout ratio, steady dividend increases, and a valuation that appears attractive, it checks a lot of the right boxes.
That said, as a small-cap stock, it doesn’t have the same growth potential or liquidity as larger banks. Investors who value stability and income over rapid appreciation may find Chesapeake Financial to be a worthwhile addition to their portfolio.
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