Provident Financial Services (NYSE:PFS) Has Announced A Dividend Of $0.24
Provident Financial Services, Inc.'s (NYSE:PFS) investors are due to receive a payment of $0.24 per share on 25th of August. Based on this payment, the dividend yield on the company's stock will be 5.0%, which is an attractive boost to shareholder returns.
Check out our latest analysis for Provident Financial Services
Provident Financial Services' Earnings Will Easily Cover The Distributions
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Having distributed dividends for at least 10 years, Provident Financial Services has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Provident Financial Services' payout ratio of 43% is a good sign as this means that earnings decently cover dividends.
Looking forward, earnings per share is forecast to rise by 7.9% over the next year. If the dividend continues along recent trends, we estimate the future payout ratio will be 43%, which is in the range that makes us comfortable with the sustainability of the dividend.
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 implies that the company grew its distributions at a yearly rate of about 6.3% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
The Dividend Has Growth Potential
The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Provident Financial Services has been growing its earnings per share at 8.7% a 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 think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. 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. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 5 analysts we track are forecasting for Provident Financial Services for free with public analyst estimates for the company. 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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