Peoples Financial Services (NASDAQ:PFIS) Has Announced A Dividend Of $0.41
The board of Peoples Financial Services Corp. (NASDAQ:PFIS) has announced that it will pay a dividend on the 15th of September, with investors receiving $0.41 per share. This means the dividend yield will be fairly typical at 3.6%.
View our latest analysis for Peoples Financial Services
Peoples Financial Services' Earnings Will Easily Cover The Distributions
Unless the payments are sustainable, the dividend yield doesn't mean too much.
Having paid out dividends for 9 years, Peoples Financial Services has a good history of paying out a part of its earnings to shareholders. Based on Peoples Financial Services' last earnings report, the payout ratio is at a decent 32%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Over the next year, EPS is forecast to fall by 21.0%. But if the dividend continues along recent trends, we estimate the future payout ratio could be 41%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business in the future.
Peoples Financial Services Doesn't Have A Long Payment History
The dividend's track record has been pretty solid, but with only 9 years of history we want to see a few more years of history before making any solid conclusions. Since 2014, the annual payment back then was $1.24, compared to the most recent full-year payment of $1.64. This means that it has been growing its distributions at 3.2% per annum over that time. It's good to see at least some dividend growth. Yet with a relatively short dividend paying history, we wouldn't want to depend on this dividend too heavily.
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. Peoples Financial Services has seen EPS rising for the last five years, at 14% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Peoples Financial Services' prospects of growing its dividend payments in the future.
Peoples Financial Services Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Peoples Financial Services might even raise payments in the future. 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. However, there are other things to consider for investors when analysing stock performance. Just as an example, we've come across 2 warning signs for Peoples Financial Services you should be aware of, and 1 of them can't be ignored. Is Peoples Financial Services not quite the opportunity you were looking for? Why not check out our selection of top 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.
