First Financial Bankshares' (NASDAQ:FFIN) Dividend Will Be Increased To $0.18
First Financial Bankshares, Inc.'s (NASDAQ:FFIN) dividend will be increasing from last year's payment of the same period to $0.18 on 3rd of July. Despite this raise, the dividend yield of 2.5% is only a modest boost to shareholder returns.
View our latest analysis for First Financial Bankshares
First Financial Bankshares' Earnings Will Easily Cover The Distributions
If it is predictable over a long period, even low dividend yields can be attractive.
Having distributed dividends for at least 10 years, First Financial Bankshares has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 42%, which means that First Financial Bankshares would be able to pay its last dividend without pressure on the balance sheet.
EPS is set to fall by 0.9% over the next 12 months. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 47%, which would be comfortable for the company to continue in the future.
First Financial Bankshares Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $0.25 in 2013 to the most recent total annual payment of $0.72. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that First Financial Bankshares has been growing its earnings per share at 11% a year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.
First Financial Bankshares 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 generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for First Financial Bankshares that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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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