The board of Community Financial System, Inc. (NYSE:CBU) has announced that it will pay a dividend of $0.47 per share on the 10th of April. Based on this payment, the dividend yield will be 2.8%, which is fairly typical for the industry.
Community Financial System's Dividend Forecasted To Be Well Covered By Earnings
Solid dividend yields are great, but they only really help us if the payment is sustainable.
Having distributed dividends for at least 10 years, Community Financial System has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Community Financial System's payout ratio of 47% is a good sign as this means that earnings decently cover dividends.
The next 3 years are set to see EPS grow by 54.9%. Analysts forecast the future payout ratio could be 35% over the same time horizon, which is a number we think the company can maintain.
View our latest analysis for Community Financial System
Community Financial System Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $1.20 in 2016, and the most recent fiscal year payment was $1.88. This means that it has been growing its distributions at 4.6% per annum over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.
We Could See Community Financial System's Dividend Growing
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Community Financial System has seen EPS rising for the last five years, at 5.2% per annum. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.
Community Financial System Looks Like A Great Dividend Stock
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. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 4 Community Financial System analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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