C&F Financial (NASDAQ:CFFI) Is Due To Pay A Dividend Of $0.44

C&F Financial Corporation's (NASDAQ:CFFI) investors are due to receive a payment of $0.44 per share on 1st of April. This payment means that the dividend yield will be 3.3%, which is around the industry average.

Check out our latest analysis for C&F Financial

C&F Financial'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, C&F Financial has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 25%, which means that C&F Financial would be able to pay its last dividend without pressure on the balance sheet.

If the trend of the last few years continues, EPS will grow by 6.3% over the next 12 months. If the dividend continues along recent trends, we estimate the future payout ratio will be 25%, which is in the range that makes us comfortable with the sustainability of the dividend.

C&F Financial Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The dividend has gone from an annual total of $1.16 in 2014 to the most recent total annual payment of $1.76. This means that it has been growing its distributions at 4.3% per annum over that time. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

The Dividend Has Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. C&F Financial has seen EPS rising for the last five years, at 6.3% per annum. 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.

C&F Financial 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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

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. See if management have their own wealth at stake, by checking insider shareholdings in C&F Financial stock. 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.