ChoiceOne Financial Services (NASDAQ:COFS) Is Paying Out A Larger Dividend Than Last Year
ChoiceOne Financial Services, Inc. (NASDAQ:COFS) has announced that it will be increasing its dividend from last year's comparable payment on the 29th of September to $0.26. This takes the dividend yield to 4.5%, which shareholders will be pleased with.
Check out our latest analysis for ChoiceOne Financial Services
ChoiceOne Financial Services' Payment Expected To Have Solid Earnings Coverage
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.
Having distributed dividends for at least 10 years, ChoiceOne Financial Services has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but ChoiceOne Financial Services' payout ratio of 33% is a good sign as this means that earnings decently cover dividends.
Looking forward, earnings per share could rise by 11.2% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the future payout ratio will be 33%, which is in the range that makes us comfortable with the sustainability of the dividend.
ChoiceOne Financial Services Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2013, the annual payment back then was $0.472, compared to the most recent full-year payment of $1.04. This works out to be a compound annual growth rate (CAGR) of approximately 8.2% a year over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.
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. We are encouraged to see that ChoiceOne Financial Services has grown earnings per share at 11% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
We Really Like ChoiceOne Financial Services' Dividend
Overall, a dividend increase is always good, and we think that ChoiceOne Financial Services is a strong income stock thanks to its track record and growing earnings. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Now, if you want to look closer, it would be worth checking out our free research on ChoiceOne Financial Services management tenure, salary, and performance. Is ChoiceOne Financial Services 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.
