Provident Financial Services (NYSE:PFS) Has Announced A Dividend Of $0.24
Provident Financial Services, Inc. (NYSE:PFS) will pay a dividend of $0.24 on the 26th of May. This means the annual payment is 5.5% of the current stock price, which is above the average for the industry.
See our latest analysis for Provident Financial Services
Provident Financial Services' Earnings Will Easily Cover The Distributions
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
Provident Financial Services has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Provident Financial Services' payout ratio of 41% is a good sign as this means that earnings decently cover dividends.
Over the next year, EPS is forecast to expand by 21.1%. If the dividend continues on this path, the future payout ratio could be 36% by next year, which we think can be pretty sustainable going forward.
Provident Financial Services Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2013, the dividend has gone from $0.52 total annually to $0.96. This works out to be a compound annual growth rate (CAGR) of approximately 6.3% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
We Could See Provident Financial Services' Dividend Growing
Investors could be attracted to the stock based on the quality of its payment history. Provident Financial Services has impressed us by growing EPS at 8.6% per year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.
We Really Like Provident Financial Services' Dividend
Overall, we like to see the dividend staying consistent, and we think Provident Financial Services might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Provident Financial Services that investors should take into consideration. 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.
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