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WSFS Financial Corporation (NASDAQ:WSFS) will pay a dividend of $0.15 on the 18th of August. This payment means the dividend yield will be 1.4%, which is below the average for the industry.
See our latest analysis for WSFS Financial
WSFS Financial's Earnings Will Easily Cover The Distributions
Even a low dividend yield can be attractive if it is sustained for years on end.
Having distributed dividends for at least 10 years, WSFS Financial has a long history of paying out a part of its earnings to shareholders. Using data from its latest earnings report, WSFS Financial's payout ratio sits at 13%, an extremely comfortable number that shows that it can pay its dividend.
Looking forward, earnings per share is forecast to fall by 7.5% over the next year. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 16%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
WSFS Financial Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2013, the annual payment back then was $0.16, compared to the most recent full-year payment of $0.60. This means that it has been growing its distributions at 14% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that WSFS Financial has grown earnings per share at 14% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
WSFS Financial Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think WSFS Financial might even raise payments in the future. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for WSFS Financial that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.