C&F Financial (NASDAQ:CFFI) Will Pay A Dividend Of US$0.40

May 27, 2022
  •  Updated
June 10, 2022
NasdaqGS:CFFI
Source: Shutterstock

The board of C&F Financial Corporation (NASDAQ:CFFI) has announced that it will pay a dividend of US$0.40 per share on the 1st of July. Based on this payment, the dividend yield will be 3.2%, which is fairly typical for the industry.

See our latest analysis for C&F Financial

C&F Financial's Dividend Is Well Covered By Earnings

We aren't too impressed by dividend yields unless they can be sustained over time. However, C&F Financial's earnings easily cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 14.2% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 19% by next year, which is in a pretty sustainable range.

historic-dividend
NasdaqGS:CFFI Historic Dividend May 27th 2022

C&F Financial Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2012, the dividend has gone from US$1.00 to US$1.60. This implies that the company grew its distributions at a yearly rate of about 4.8% over that duration. 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.

The Dividend Looks Likely To Grow

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 14% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

C&F Financial Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic 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 C&F Financial that you should be aware of before investing. 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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About NasdaqGS:CFFI

C&F Financial

C&F Financial Corporation operates as a bank holding company for Citizens and Farmers Bank that provides banking services to individuals and businesses.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation4
Future Growth0
Past Performance3
Financial Health6
Dividends4

Read more about these checks in the individual report sections or in our analysis model.

Flawless balance sheet, good value and pays a dividend.