Franklin Financial Services (NASDAQ:FRAF) Is Paying Out A Dividend Of $0.32
Franklin Financial Services Corporation (NASDAQ:FRAF) will pay a dividend of $0.32 on the 23rd of August. The dividend yield will be 4.4% based on this payment which is still above the industry average.
See our latest analysis for Franklin Financial Services
Franklin Financial Services' Earnings Will Easily Cover The Distributions
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Franklin Financial Services has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 28%, which means that Franklin Financial Services would be able to pay its last dividend without pressure on the balance sheet.
If the trend of the last few years continues, EPS will grow by 41.5% over the next 12 months. If the dividend continues on this path, the future payout ratio could be 28% by next year, which we think can be pretty sustainable going forward.
Franklin Financial Services Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2013, the dividend has gone from $0.68 total annually to $1.28. This works out to be a compound annual growth rate (CAGR) of approximately 6.5% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
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. Franklin Financial Services has seen EPS rising for the last five years, at 42% per annum. Rapid earnings growth and a low payout ratio suggest this company has been effectively reinvesting in its business. Should that continue, this company could have a bright future.
Franklin Financial Services Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Franklin Financial Services might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend 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. See if management have their own wealth at stake, by checking insider shareholdings in Franklin Financial Services stock. If you are a dividend investor, you might also want to look at our curated list of high yield 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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