Yahoo Finance Lakeland Financial (NASDAQ:LKFN) Will Pay A Dividend Of $0.48
The board of Lakeland Financial Corporation (NASDAQ:LKFN) has announced that it will pay a dividend on the 6th of May, with investors receiving $0.48 per share. This takes the annual payment to 3.3% of the current stock price, which is about average for the industry.
See our latest analysis for Lakeland Financial
Lakeland Financial's Dividend Forecasted To Be Well Covered By Earnings
We aren't too impressed by dividend yields unless they can be sustained over time.
Lakeland Financial has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 51%, which means that Lakeland Financial would be able to pay its last dividend without pressure on the balance sheet.
Looking forward, earnings per share is forecast to fall by 4.5% over the next 3 years. Fortunately, analysts forecast the future payout ratio to be 55% over the same time horizon, which is in the range that makes us comfortable with the sustainability of the dividend.
Lakeland Financial Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $0.507 in 2014 to the most recent total annual payment of $1.92. This implies that the company grew its distributions at a yearly rate of about 14% over that duration. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
Lakeland Financial May Find It Hard To Grow The Dividend
Investors could be attracted to the stock based on the quality of its payment history. Earnings has been rising at 3.0% per annum over the last five years, which admittedly is a bit slow. Lakeland Financial is struggling to find viable investments, so it is returning more to shareholders. While this isn't necessarily a negative, it definitely signals that dividend growth could be constrained in the future unless earnings start to pick up again.
Lakeland Financial Looks Like A Great Dividend Stock
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All of these factors considered, we think this has solid potential as a dividend stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, Lakeland Financial has 2 warning signs (and 1 which can't be ignored) we think you should know about. Is Lakeland Financial not quite the opportunity you were looking for? Why not check out our selection of top 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.
