First Community (NASDAQ:FCCO) Will Pay A Dividend Of $0.15

The board of First Community Corporation (NASDAQ:FCCO) has announced that it will pay a dividend of $0.15 per share on the 12th of November. Including this payment, the dividend yield on the stock will be 2.6%, which is a modest boost for shareholders' returns.

See our latest analysis for First Community

First Community's Earnings Will Easily Cover The Distributions

Even a low dividend yield can be attractive if it is sustained for years on end.

First Community has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on First Community's last earnings report, the payout ratio is at a decent 34%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next 3 years, EPS is forecast to expand by 57.3%. Analysts forecast the future payout ratio could be 27% over the same time horizon, which is a number we think the company can maintain.

First Community Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.24 in 2014 to the most recent total annual payment of $0.60. This works out to be a compound annual growth rate (CAGR) of approximately 9.6% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

First Community May Find It Hard To Grow The Dividend

The company's investors will be pleased to have been receiving dividend income for some time. Earnings per share has been crawling upwards at 3.3% per year. Earnings growth is slow, but on the plus side, the dividend payout ratio is low and dividends could grow faster than earnings, if the company decides to increase its payout ratio.

First Community Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think First Community might even raise payments in the future. 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 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 3 First Community analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is First Community not quite the opportunity you were looking for? Why not check out our selection of top 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.