Friday, February 24, 2012

Dividend Machine for week of February 20, 2012

Community Bank Systems, Inc.

                If I told you to buy a bank in March of 2008, would you believe that the dividend income from that investment would have increased over twenty-three percent?  Well, I am here to tell you that I am as shocked as you are, but Community Bank Systems, Inc. (CBU) has delivered.  Do you own any other investment that increased your income by over 23% in the past four years?

                CBU (Community Bank Systems, Inc.) paid a quarterly dividend of $.21 in March 2008.  If you own it by March 13, 2012, you will be paid $.26 on April 10, 2012.  In spite of all the difficulties in the banking industry,  your dividend income would have increase by 23.8%?   Income investors who were in this investment, I applaud you.

                CBU meets our very high dividend criteria.  CBU is selling today around $27.67 per share.  The annualized yield (four quarters of $.26 per share) is 3.75 percent.    CBU earned $1.97 during the last four quarters and they paid dividends of $.98 per share.  They have increased the dividend for 19 consecutive years.   CBU like all financials has a D/E ratio greater than one but within industry standards.

                If you are looking to diversify and take advantage of the potential for improvement in our financial industry, then CBU might work for you.  If, on the other hand, you think the financial industry will sink, then you may want not want to add CBU to your income portfolio.  If history is any guide to the future, this is one company I am willing to consider.

Very Truly Yours,

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