Primis Financial (NASDAQ:FRST) Has Announced A Dividend Of $0.10

The board of Primis Financial Corp. (NASDAQ:FRST) has announced that it will pay a dividend on the 26th of August, with investors receiving $0.10 per share. This payment means that the dividend yield will be 2.9%, which is around the industry average.

Check out our latest analysis for Primis Financial

Primis Financial's 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.

Primis Financial has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Primis Financial's payout ratio of 42% is a good sign as this means that earnings decently cover dividends.

The next 3 years are set to see EPS grow by 41.6%. The future payout ratio could be 32% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Dividend Volatility

While the company has been paying a dividend for a long time, it has cut the dividend at least once in the last 10 years. Since 2012, the dividend has gone from $0.06 total annually to $0.40. This means that it has been growing its distributions at 21% per annum over that time. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Primis Financial has seen EPS rising for the last five years, at 23% per annum. Primis Financial is clearly able to grow rapidly while still returning cash to shareholders, positioning it to become a strong dividend payer in the future.

Primis Financial Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 2 warning signs for Primis Financial that investors need to be conscious of moving forward. Is Primis Financial 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.