Lakeland Financial (NASDAQ:LKFN) Is Paying Out A Larger Dividend Than Last Year
Lakeland Financial Corporation (NASDAQ:LKFN) will increase its dividend on the 5th of February to $0.48, which is 4.3% higher than last year's payment from the same period of $0.46. This makes the dividend yield about the same as the industry average at 2.9%.
See our latest analysis for Lakeland Financial
Lakeland Financial's Earnings Will Easily Cover The Distributions
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
Lakeland Financial has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 52%, which means that Lakeland Financial would be able to pay its last dividend without pressure on the balance sheet.
EPS is set to fall by 1.0% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 55% over the same time period, which is in a pretty comfortable range.
Lakeland Financial 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 $0.453 in 2014, and the most recent fiscal year payment was $1.84. This means that it has been growing its distributions at 15% per annum over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.
Dividend Growth May Be Hard To Achieve
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings have grown at around 4.8% a year for the past five years, which isn't massive but still better than seeing them shrink. Growth of 4.8% per annum is not particularly high, which might explain why the company is paying out a higher proportion of earnings. This isn't bad in itself, but unless earnings growth pick up we wouldn't expect dividends to grow either.
Lakeland Financial 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. 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. 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 Lakeland Financial that investors should know about before committing capital to this stock. 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.
