C&F Financial (NASDAQ:CFFI) Will Pay A Larger Dividend Than Last Year At $0.42
The board of C&F Financial Corporation (NASDAQ:CFFI) has announced that the dividend on 1st of October will be increased to $0.42, which will be 5.0% higher than last year's payment of $0.40 which covered the same period. Based on this payment, the dividend yield for the company will be 3.2%, which is fairly typical for the industry.
See our latest analysis for C&F Financial
C&F Financial's Earnings Will Easily Cover The Distributions
Solid dividend yields are great, but they only really help us if the payment is sustainable.
Having distributed dividends for at least 10 years, C&F Financial has a long history of paying out a part of its earnings to shareholders. Using data from its latest earnings report, C&F Financial's payout ratio sits at 22%, an extremely comfortable number that shows that it can pay its dividend.
Over the next year, EPS could expand by 14.3% if recent trends continue. Assuming the dividend continues along recent trends, we think the future payout ratio could be 20% by next year, which is in a pretty sustainable range.
C&F Financial Has A Solid Track Record
The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $1.04 in 2012, and the most recent fiscal year payment was $1.60. This means that it has been growing its distributions at 4.4% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. C&F Financial has seen EPS rising for the last five years, at 14% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
We Really Like C&F Financial's Dividend
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Are management backing themselves to deliver performance? Check their shareholdings in C&F Financial in our latest insider ownership analysis. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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