ChoiceOne Financial Services, Inc.'s (NASDAQ:COFS) investors are due to receive a payment of $0.25 per share on 30th of September. The dividend yield will be 4.6% based on this payment which is still above the industry average.
ChoiceOne Financial Services' Earnings Will Easily Cover The Distributions
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.
ChoiceOne Financial Services has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but ChoiceOne Financial Services' payout ratio of 34% is a good sign as this means that earnings decently cover dividends.
Over the next year, EPS could expand by 10.3% if recent trends continue. If the dividend continues on this path, the future payout ratio could be 34% by next year, which we think can be pretty sustainable going forward.
ChoiceOne Financial Services Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The annual payment during the last 10 years was $0.435 in 2012, and the most recent fiscal year payment was $1.00. This implies that the company grew its distributions at a yearly rate of about 8.7% over that duration. 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
The company's investors will be pleased to have been receiving dividend income for some time. ChoiceOne Financial Services has seen EPS rising for the last five years, at 10% per annum. ChoiceOne Financial Services definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
ChoiceOne Financial Services Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think ChoiceOne Financial Services might even raise payments in the future. 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.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. Are management backing themselves to deliver performance? Check their shareholdings in ChoiceOne Financial Services in our latest insider ownership analysis. 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.
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