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ChoiceOne Financial Services (NASDAQ:COFS) Has Announced That It Will Be Increasing Its Dividend To $0.26
ChoiceOne Financial Services, Inc.'s (NASDAQ:COFS) dividend will be increasing from last year's payment of the same period to $0.26 on 30th of June. This makes the dividend yield 5.0%, which is above the industry average.
View our latest analysis for ChoiceOne Financial Services
ChoiceOne Financial Services' Dividend Forecasted To Be Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
Having distributed dividends for at least 10 years, ChoiceOne Financial Services has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but ChoiceOne Financial Services' payout ratio of 32% is a good sign as this means that earnings decently cover dividends.
Over the next year, EPS could expand by 12.4% if recent trends continue. If the dividend continues on this path, the future payout ratio could be 31% by next year, which we think can be pretty sustainable going forward.
ChoiceOne Financial Services Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the dividend has gone from $0.435 total annually to $1.04. This works out to be a compound annual growth rate (CAGR) of approximately 9.1% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. ChoiceOne Financial Services has impressed us by growing EPS at 12% per year over the past five years. ChoiceOne Financial Services definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
ChoiceOne Financial Services Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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. However, there are other things to consider for investors when analysing stock performance. Are management backing themselves to deliver performance? Check their shareholdings in ChoiceOne Financial Services in our latest insider ownership analysis. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
About NasdaqCM:COFS
ChoiceOne Financial Services
Operates as the bank holding company for ChoiceOne Bank that provides banking services to corporations, partnerships, and individuals in Michigan.
Flawless balance sheet, undervalued and pays a dividend.
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