Income Investors Should Know The Financial Institutions Inc (NASDAQ:FISI) Ex-Dividend Date
If you are interested in cashing in on Financial Institutions Inc’s (NASDAQ:FISI) upcoming dividend of US$0.24 per share, you only have 4 days left to buy the shares before its ex-dividend date, 12 September 2018, in time for dividends payable on the 02 October 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Financial Institutions’s latest financial data to analyse its dividend attributes.
View our latest analysis for Financial Institutions
5 questions to ask before buying a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is its annual yield among the top 25% of dividend-paying companies?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has dividend per share amount increased over the past?
Can it afford to pay the current rate of dividends from its earnings?
Will it be able to continue to payout at the current rate in the future?
How does Financial Institutions fare?
The current trailing twelve-month payout ratio for the stock is 36.3%, which means that the dividend is covered by earnings. Going forward, analysts expect FISI’s payout to remain around the same level at 36.3% of its earnings, which leads to a dividend yield of around 3.0%. In addition to this, EPS should increase to $2.62.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time.
Compared to its peers, Financial Institutions generates a yield of 2.9%, which is high for Banks stocks but still below the market’s top dividend payers.
Next Steps:
Taking into account the dividend metrics, Financial Institutions ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three key aspects you should further research:
Future Outlook: What are well-informed industry analysts predicting for FISI’s future growth? Take a look at our free research report of analyst consensus for FISI’s outlook.
Valuation: What is FISI worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether FISI is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
