Franklin Financial Services (NASDAQ:FRAF) Has Affirmed Its Dividend Of $0.32

Franklin Financial Services Corporation (NASDAQ:FRAF) has announced that it will pay a dividend of $0.32 per share on the 22nd of November. This means the dividend yield will be fairly typical at 4.3%.

Check out our latest analysis for Franklin Financial Services

Franklin Financial Services' Payment Expected To Have Solid Earnings Coverage

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Franklin Financial Services has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Franklin Financial Services' last earnings report, the payout ratio is at a decent 38%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, earnings per share could rise by 16.1% over the next year if the trend from the last few years continues. If the dividend continues on this path, the future payout ratio could be 35% by next year, which we think can be pretty sustainable going forward.

Franklin Financial Services Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was $0.68 in 2013, and the most recent fiscal year payment was $1.28. This means that it has been growing its distributions at 6.5% per annum 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.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Franklin Financial Services has seen EPS rising for the last five years, at 16% per annum. Franklin Financial Services definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Franklin Financial Services' Dividend

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. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. 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 Franklin 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.