ChoiceOne Financial Services (NASDAQ:COFS) Is Due To Pay A Dividend Of $0.25

The board of ChoiceOne Financial Services, Inc. (NASDAQ:COFS) has announced that it will pay a dividend of $0.25 per share on the 30th of September. Based on this payment, the dividend yield on the company's stock will be 4.6%, which is an attractive boost to shareholder returns.

View our latest analysis for ChoiceOne Financial Services

ChoiceOne Financial Services' Dividend Forecasted To Be Well Covered By Earnings

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.

ChoiceOne Financial Services has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but ChoiceOne Financial Services' payout ratio of 34% is a good sign as this means that earnings decently cover dividends.

Looking forward, earnings per share could rise by 10.3% over the next year if the trend from the last few years continues. If the dividend continues along recent trends, we estimate the future payout ratio will be 34%, which is in the range that makes us comfortable with the sustainability of the dividend.

ChoiceOne Financial Services Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2012, the dividend has gone from $0.435 total annually to $1.00. This works out to be a compound annual growth rate (CAGR) of approximately 8.7% a year over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

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 seen EPS rising for the last five years, at 10% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

ChoiceOne Financial Services Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think ChoiceOne Financial Services might even raise payments in the future. 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. However, there are other things to consider for investors when analysing stock performance. You can also discover whether shareholders are aligned with insider interests by checking our visualisation of insider shareholdings and trades in ChoiceOne Financial Services 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.