Citizens Financial Services (NASDAQ:CZFS) Is Paying Out A Dividend Of $0.49

Citizens Financial Services, Inc. (NASDAQ:CZFS) will pay a dividend of $0.49 on the 27th of September. This means that the annual payment will be 3.7% of the current stock price, which is in line with the average for the industry.

See our latest analysis for Citizens Financial Services

Citizens Financial Services' Payment Expected To Have Solid Earnings Coverage

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Citizens Financial Services has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 34%, which means that Citizens Financial Services would be able to pay its last dividend without pressure on the balance sheet.

Over the next year, EPS is forecast to expand by 7.1%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 35% by next year, which is in a pretty sustainable range.

Citizens Financial Services Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the dividend has gone from $1.03 total annually to $1.94. This means that it has been growing its distributions at 6.5% per annum 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's Growth Prospects Are Limited

Investors could be attracted to the stock based on the quality of its payment history. Earnings per share has been crawling upwards at 3.1% per year. If Citizens Financial Services is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

Citizens Financial Services 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. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. 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 Citizens Financial Services stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.