Why Arrow Financial (AROW) is a Great Dividend Stock Right Now
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 17 2025
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Source: NASDAQ.COM
Dividend Importance: Investors prioritize cash flow from investments, with dividends playing a significant role in long-term returns, often exceeding one-third of total returns. Arrow Financial (AROW) offers a competitive dividend yield of 4.15% and has shown consistent annual growth in its dividends.
Investment Outlook: Arrow Financial is considered a strong investment opportunity due to its solid earnings growth forecast for 2025 and a favorable payout ratio of 57%. The stock currently holds a Zacks Rank of 3 (Hold), indicating potential for income investors amidst rising interest rates.
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Analyst Views on AROW
About AROW
Arrow Financial Corporation is a bank holding company. The Company through its subsidiary, Arrow Bank National Association (Arrow Bank) provides a full range of services to individuals and small to mid-size businesses in New York State from Albany to the Canadian border. In addition, through an indirect lending program, it sources consumer loans from a network of automobile dealers that operate throughout New York and Vermont. It has a wealth management department which provides investment management and trust services. It’s subsidiary of Arrow Bank is Upstate Agency LLC, offering insurance services including property, and casualty insurance, group health insurance and individual life insurance products. North Country Investment Advisers, Inc., a registered investment adviser that provides investment advice to its proprietary mutual fund, and Arrow Properties, Inc., a real estate investment trust, or REIT, are subsidiaries of Arrow Bank.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Arrow Financial Reports Record Q4 Earnings and Metrics
- Earnings Growth: Arrow Financial's Q4 GAAP EPS reached $0.85 with revenues of $43.41 million, indicating a significant improvement in profitability that reflects robust financial management and market performance.
- Record Net Interest Income: The company reported net interest income of $35.1 million, with a net interest margin of 3.24%, up from 3.22% in the previous quarter, demonstrating effective strategies in a challenging interest rate environment.
- Tangible Book Value Increase: Tangible book value per share rose from $23.85 to $24.71, a 3.6% increase, which not only enhances shareholder wealth but also strengthens the foundation for future capital operations.
- Improved Return on Assets: The return on average assets was 1.24%, benefiting from a 9 basis point increase due to successful tax strategy implementation, while net charge-offs remained low at 0.08%, reflecting strong credit management.
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Arrow Financial Increases Quarterly Dividend by 3.4%
- Dividend Increase: Arrow Financial has declared a quarterly dividend of $0.30 per share, marking a 3.4% increase from the previous $0.29, demonstrating the company's ongoing commitment to stable cash flow and shareholder returns.
- Yield Insight: The forward yield of 3.7% reflects the company's ability to provide attractive returns to investors in the current economic climate, enhancing market confidence in its stock.
- Payment Details: The new dividend will be payable on February 25, with a record date of February 11 and an ex-dividend date also set for February 11, ensuring shareholders receive timely benefits and strengthening the relationship between the company and its investors.
- Market Reaction: The dividend increase aligns with Arrow Financial's historical earnings data, although the market's assessment of its overall performance is noted as “progress is good, but not good enough,” indicating that the company still has work to do in improving its results.
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