Peoples Financial Services' (NASDAQ:PFIS) Dividend Will Be $0.41
Peoples Financial Services Corp. (NASDAQ:PFIS) has announced that it will pay a dividend of $0.41 per share on the 15th of December. This means that the annual payment will be 3.8% of the current stock price, which is in line with the average for the industry.
Check out our latest analysis for Peoples Financial Services
Peoples Financial Services' Payment Expected To Have Solid Earnings Coverage
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.
Peoples Financial Services has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Peoples Financial Services' last earnings report, the payout ratio is at a decent 35%, 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 4.5%. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 37%, which would be comfortable for the company to continue in the future.
Peoples Financial Services Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the annual payment back then was $1.24, compared to the most recent full-year payment of $1.64. This works out to be a compound annual growth rate (CAGR) of approximately 2.8% a year over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. Peoples Financial Services has seen EPS rising for the last five years, at 10% per annum. Peoples Financial Services definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like Peoples Financial Services' Dividend
Overall, we like to see the dividend staying consistent, and we think Peoples Financial Services might even raise payments in the future. The earnings easily cover the company's distributions, and the company is generating plenty of cash. 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 in all, this checks a lot of the boxes we look for when choosing an income stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. 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. 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.
