CF Bankshares (NASDAQ:CFBK) Is Due To Pay A Dividend Of $0.06
CF Bankshares Inc. (NASDAQ:CFBK) will pay a dividend of $0.06 on the 1st of August. This means the annual payment will be 1.5% of the current stock price, which is lower than the industry average.
View our latest analysis for CF Bankshares
CF Bankshares' Earnings Will Easily Cover The Distributions
While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.
CF Bankshares is just starting to establish itself as being able to pay dividends to shareholders, given its short 3-year history of distributing earnings. Based on its last earnings report however, the payout ratio is at a comfortable 6.7%, meaning that CF Bankshares may be able to sustain this dividend for future years if it continues on this earnings trend.
EPS is set to fall by 6.9% over the next 12 months. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 8.6%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
CF Bankshares Is Still Building Its Track Record
The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. Since 2020, the dividend has gone from $0.12 total annually to $0.24. This works out to be a compound annual growth rate (CAGR) of approximately 26% a year over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
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. CF Bankshares has impressed us by growing EPS at 51% per year over the past five years. Earnings have been growing rapidly, and with a low payout ratio we think that the company could turn out to be a great dividend stock.
CF Bankshares Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think CF Bankshares might even raise payments in the future. The earnings easily cover the company's distributions, and the company is generating plenty of cash. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've picked out 1 warning sign for CF Bankshares that investors should know about before committing capital to this stock. Is CF Bankshares not quite the opportunity you were looking for? Why not check out our selection of top 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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