It looks like First Commonwealth Financial Corporation (NYSE:FCF) is about to go ex-dividend in the next 4 days. You can purchase shares before the 6th of August in order to receive the dividend, which the company will pay on the 21st of August.
First Commonwealth Financial's upcoming dividend is US$0.11 a share, following on from the last 12 months, when the company distributed a total of US$0.44 per share to shareholders. Looking at the last 12 months of distributions, First Commonwealth Financial has a trailing yield of approximately 5.6% on its current stock price of $7.87. If you buy this business for its dividend, you should have an idea of whether First Commonwealth Financial's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. First Commonwealth Financial is paying out an acceptable 51% of its profit, a common payout level among most companies.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Fortunately for readers, First Commonwealth Financial's earnings per share have been growing at 12% a year for the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, First Commonwealth Financial has lifted its dividend by approximately 14% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.
The Bottom Line
Has First Commonwealth Financial got what it takes to maintain its dividend payments? Earnings per share are growing nicely, and First Commonwealth Financial is paying out a percentage of its earnings that is around the average for dividend-paying stocks. In summary, First Commonwealth Financial appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
On that note, you'll want to research what risks First Commonwealth Financial is facing. For example - First Commonwealth Financial has 1 warning sign we think you should be aware of.
If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. 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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