Why you might be interested in Premier Financial Corp. (NASDAQ:PFC) for its upcoming dividend
Readers hoping to buy Premier Financial Corp. (NASDAQ:PFC) for its dividend will have to come shortly, as the stock is set to trade ex-dividend. The ex-dividend date is one business day before a company’s record date, which is the date the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important because the settlement process involves two full business days. So if you miss this date, you will not be on the company’s books as of the record date. In other words, investors can buy Premier Financial shares before August 4 in order to be eligible for the dividend, which will be paid on August 12.
The company’s next dividend payment will be $0.30 per share, and over the past 12 months the company has paid a total of $1.20 per share. Calculating the value of last year’s payouts shows Premier Financial has a 4.2% yield on the current share price of $28.48. Dividends contribute greatly to investment returns for long-term holders, but only if the dividend continues to be paid. That’s why we always have to check if the dividend payouts seem sustainable and if the business is growing.
If a company pays out more dividends than it has earned, the dividend may become unsustainable – a less than ideal situation. That’s why it’s good to see Premier Financial paying out a modest 41% of its profits.
Generally speaking, the lower a company’s payout ratios, the more resilient its dividend tends to be.
Click here to see the company’s payout ratio, as well as analysts’ estimates of its future dividends.
Have earnings and dividends increased?
Companies with consistently rising earnings per share tend to create the best dividend-paying stocks because they generally find it easier to increase dividends per share. If business goes into a recession and the dividend is cut, the company could see its value drop precipitously. Luckily for readers, Premier Financial’s earnings per share have grown 12% annually over the past five years.
Another key way to gauge a company’s dividend outlook is to measure its historical rate of dividend growth. Premier Financial has recorded dividend growth of 28% per year on average over the past 10 years. It’s exciting to see that earnings and dividends per share have grown rapidly over the past few years.
To sum up
Does Premier Financial have what it takes to maintain its dividend payouts? Companies like Premier Financial, which grow rapidly and pay out only a small fraction of profits, typically reinvest heavily in their business. Perhaps more importantly – it can sometimes indicate that management is focused on the long-term future of the business. We think this is quite an attractive combination and would be interested in investigating Premier Financial more closely.
Have you ever wondered what the future holds for Premier Financial? See the forecasts of the four analysts we follow, with this visualization of its historical and future estimated earnings and cash flow
A common investment mistake is to buy the first good stock you see. Here you can find a complete list of high yielding dividend stocks.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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