Be Sure To Check Out Franklin Financial Services Corporation (NASDAQ:FRAF) Before It Goes Ex-Dividend

Franklin Financial Services Corporation (NASDAQ:FRAF) stock is about to trade ex-dividend in four days. You will need to purchase shares before the 4th of February to receive the dividend, which will be paid on the 24th of February.

Franklin Financial Services's next dividend payment will be US$0.30 per share. Last year, in total, the company distributed US$1.20 to shareholders. Looking at the last 12 months of distributions, Franklin Financial Services has a trailing yield of approximately 4.4% on its current stock price of $27.01. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether Franklin Financial Services can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Franklin Financial Services

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Franklin Financial Services paid out a comfortable 41% of its profit last year.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see how much of its profit Franklin Financial Services paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. This is why it's a relief to see Franklin Financial Services earnings per share are up 4.0% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Franklin Financial Services has increased its dividend at approximately 1.1% a year on average.

To Sum It Up

Is Franklin Financial Services worth buying for its dividend? Franklin Financial Services has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. Franklin Financial Services ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

On that note, you'll want to research what risks Franklin Financial Services is facing. For example - Franklin Financial Services has 1 warning sign we think you should be aware of.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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