Yahoo Finance First Financial Bankshares' (NASDAQ:FFIN) Upcoming Dividend Will Be Larger Than Last Year's
The board of First Financial Bankshares, Inc. (NASDAQ:FFIN) has announced that it will be paying its dividend of $0.17 on the 3rd of January, an increased payment from last year's comparable dividend. Even though the dividend went up, the yield is still quite low at only 1.8%.
See our latest analysis for First Financial Bankshares
First Financial Bankshares' Dividend Forecasted To Be Well Covered By Earnings
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.
First Financial Bankshares has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but First Financial Bankshares' payout ratio of 39% is a good sign as this means that earnings decently cover dividends.
Looking forward, EPS is forecast to rise by 16.4% over the next 3 years. The future payout ratio could be 42% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
First Financial Bankshares Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2012, the dividend has gone from $0.24 total annually to $0.68. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that First Financial Bankshares has grown earnings per share at 14% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for First Financial Bankshares' prospects of growing its dividend payments in the future.
We Really Like First Financial Bankshares' Dividend
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 6 analysts we track are forecasting for First Financial Bankshares for free with public analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
