Shares of First Financial Bankshares Inc (NASDAQ:FFIN) will begin trading ex-dividend in 3 days. To qualify for the dividend check of $0.19 per share, investors must have owned the shares prior to 14 March 2018, which is the last day the company’s management will finalize their list of shareholders to which they will send dividend payments. Should you diversify into First Financial Bankshares and boost your portfolio income stream? Well, keep on reading because today, I’m going to look at the latest data and analyze the stock and its dividend property in further detail. View our latest analysis for First Financial Bankshares
Here’s how I find good dividend stocks
If you are a dividend investor, you should always assess these five key metrics:
- Is it the top 25% annual dividend yield payer?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has it increased its dividend per share amount over the past?
- Is it able to pay the current rate of dividends from its earnings?
- Will the company be able to keep paying dividend based on the future earnings growth?
How does First Financial Bankshares fare?
The current trailing twelve-month payout ratio for the stock is 41.20%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 36.66%, leading to a dividend yield of around 1.64%. However, EPS should increase to $2.06, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. FFIN has increased its DPS from $0.43 to $0.76 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes FFIN a true dividend rockstar. In terms of its peers, First Financial Bankshares generates a yield of 1.55%, which is on the low-side for Banks stocks.
Considering the dividend attributes we analyzed above, First Financial Bankshares is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. There are three key factors you should look at:
- Future Outlook: What are well-informed industry analysts predicting for FFIN’s future growth? Take a look at our free research report of analyst consensus for FFIN’s outlook.
- Valuation: What is FFIN worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether FFIN is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.