Franklin Financial Services (NASDAQ:FRAF) Has Announced A Dividend Of $0.32
The board of Franklin Financial Services Corporation (NASDAQ:FRAF) has announced that it will pay a dividend on the 22nd of November, with investors receiving $0.32 per share. This means that the annual payment will be 4.3% of the current stock price, which is in line with the average for the industry.
See our latest analysis for Franklin Financial Services
Franklin Financial Services' Earnings Will Easily Cover The Distributions
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.
Franklin Financial Services has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Franklin Financial Services' last earnings report, the payout ratio is at a decent 38%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Looking forward, earnings per share could rise by 16.1% over the next year if the trend from the last few years continues. If the dividend continues on this path, the future payout ratio could be 35% by next year, which we think can be pretty sustainable going forward.
Franklin Financial Services Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $0.68 in 2013 to the most recent total annual payment of $1.28. This means that it has been growing its distributions at 6.5% per annum over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that Franklin Financial Services has been growing its earnings per share at 16% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Franklin Financial Services' prospects of growing its dividend payments in the future.
Franklin Financial Services Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Are management backing themselves to deliver performance? Check their shareholdings in Franklin Financial Services in our latest insider ownership analysis. 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.
