ChoiceOne Financial Services (NASDAQ:COFS) Is Due To Pay A Dividend Of $0.27
The board of ChoiceOne Financial Services, Inc. (NASDAQ:COFS) has announced that it will pay a dividend of $0.27 per share on the 29th of March. This will take the dividend yield to an attractive 4.1%, providing a nice boost to shareholder returns.
Check out our latest analysis for ChoiceOne Financial Services
ChoiceOne Financial Services' Earnings Will Easily Cover The Distributions
If the payments aren't sustainable, a high yield for a few years won't matter that much.
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. Based on ChoiceOne Financial Services' last earnings report, the payout ratio is at a decent 35%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Over the next 3 years, EPS is forecast to expand by 3.4%. Analysts forecast the future payout ratio could be 38% over the same time horizon, which is a number we think the company can maintain.
ChoiceOne Financial Services Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was $0.472 in 2014, and the most recent fiscal year payment was $1.08. This implies that the company grew its distributions at a yearly rate of about 8.6% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
We Could See ChoiceOne Financial Services' Dividend Growing
The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that ChoiceOne Financial Services has grown earnings per share at 9.6% per year over the past five years. 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
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for ChoiceOne Financial Services that investors should know about before committing capital to this stock. 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.
