Atlantic Union Bankshares Corporation (NASDAQ:AUB) will increase its dividend on the 26th of August to $0.30, which is 7.1% higher than last year's payment from the same period of $0.28. The payment will take the dividend yield to 3.2%, which is in line with the average for the industry.

Check out our latest analysis for Atlantic Union Bankshares

Atlantic Union Bankshares' Dividend Forecasted To Be Well Covered By Earnings

Unless the payments are sustainable, the dividend yield doesn't mean too much.

Atlantic Union Bankshares has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Atlantic Union Bankshares' last earnings report, the payout ratio is at a decent 39%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, earnings per share is forecast to rise by 14.1% over the next year. Assuming the dividend continues along recent trends, we think the future payout ratio could be 37% by next year, which is in a pretty sustainable range.

Atlantic Union Bankshares Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was $0.28 in 2012, and the most recent fiscal year payment was $1.12. This means that it has been growing its distributions at 15% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Atlantic Union Bankshares has grown earnings per share at 10% per year over the past five years. Atlantic Union Bankshares definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Atlantic Union Bankshares Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Atlantic Union Bankshares that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.