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First Commonwealth Financial Corporation's (NYSE:FCF) dividend will be increasing from last year's payment of the same period to $0.135 on 23rd of May. This makes the dividend yield about the same as the industry average at 3.5%.
We check all companies for important risks. See what we found for First Commonwealth Financial in our free report.
First Commonwealth Financial's Payment Expected To Have Solid Earnings Coverage
We aren't too impressed by dividend yields unless they can be sustained over time.
First Commonwealth Financial 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 Commonwealth Financial's payout ratio of 39% is a good sign as this means that earnings decently cover dividends.
Over the next year, EPS is forecast to expand by 10.4%. If the dividend continues on this path, the future payout ratio could be 38% by next year, which we think can be pretty sustainable going forward.
Check out our latest analysis for First Commonwealth Financial
First Commonwealth Financial Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2015, the annual payment back then was $0.28, compared to the most recent full-year payment of $0.54. This means that it has been growing its distributions at 6.8% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
We Could See First Commonwealth Financial's Dividend Growing
Investors could be attracted to the stock based on the quality of its payment history. First Commonwealth Financial has impressed us by growing EPS at 9.3% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
We Really Like First Commonwealth Financial's Dividend
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. 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 7 First Commonwealth Financial analysts we track are forecasting continued growth with our free report on analyst estimates for the company. If you are a dividend investor, you might also want to look at our curated list of high yield 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.