Peoples Financial Services (NASDAQ:PFIS) Will Pay A Dividend Of $0.41
The board of Peoples Financial Services Corp. (NASDAQ:PFIS) has announced that it will pay a dividend of $0.41 per share on the 15th of March. This makes the dividend yield 4.0%, which will augment investor returns quite nicely.
See our latest analysis for Peoples Financial Services
Peoples Financial Services' Dividend Forecasted To Be Well Covered By Earnings
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.
Peoples 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 43%, which means that Peoples Financial Services would be able to pay its last dividend without pressure on the balance sheet.
The next 3 years are set to see EPS grow by 70.8%. Analysts forecast the future payout ratio could be 47% over the same time horizon, which is a number we think the company can maintain.
Peoples Financial Services Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $1.24 in 2014, and the most recent fiscal year payment was $1.64. This implies that the company grew its distributions at a yearly rate of about 2.8% over that duration. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.
Peoples Financial Services May Find It Hard To Grow The Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings per share has been crawling upwards at 2.9% per year. Peoples Financial Services is struggling to find viable investments, so it is returning more to shareholders. While this isn't necessarily a negative, it definitely signals that dividend growth could be constrained in the future unless earnings start to pick up again.
Peoples Financial Services Looks Like A Great Dividend Stock
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
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. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in Peoples Financial Services stock. 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.
