Yahoo Finance Be Sure To Check Out Peoples Financial Services Corp. (NASDAQ:PFIS) Before It Goes Ex-Dividend
Readers hoping to buy Peoples Financial Services Corp. (NASDAQ:PFIS) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Thus, you can purchase Peoples Financial Services' shares before the 25th of February in order to receive the dividend, which the company will pay on the 15th of March.
The company's upcoming dividend is US$0.39 a share, following on from the last 12 months, when the company distributed a total of US$1.56 per share to shareholders. Calculating the last year's worth of payments shows that Peoples Financial Services has a trailing yield of 3.2% on the current share price of $48.86. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Peoples Financial Services has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Peoples Financial Services
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. Peoples Financial Services has a low and conservative payout ratio of just 25% of its income after tax.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see how much of its profit Peoples Financial Services paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Fortunately for readers, Peoples Financial Services's earnings per share have been growing at 18% a year for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past eight years, Peoples Financial Services has increased its dividend at approximately 2.9% a year on average. Earnings per share have been growing much quicker than dividends, potentially because Peoples Financial Services is keeping back more of its profits to grow the business.
To Sum It Up
Is Peoples Financial Services worth buying for its dividend? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. Peoples Financial Services ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
So while Peoples Financial Services looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example - Peoples Financial Services has 1 warning sign we think you should be aware of.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
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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.
