Univest Financial (NASDAQ:UVSP) Is Due To Pay A Dividend Of $0.21

Univest Financial Corporation's (NASDAQ:UVSP) investors are due to receive a payment of $0.21 per share on 20th of November. This means that the annual payment will be 3.0% of the current stock price, which is in line with the average for the industry.

See our latest analysis for Univest Financial

Univest 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.

Having distributed dividends for at least 10 years, Univest Financial has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 34%, which means that Univest Financial would be able to pay its last dividend without pressure on the balance sheet.

Over the next 3 years, EPS is forecast to expand by 5.2%. Analysts forecast the future payout ratio could be 34% over the same time horizon, which is a number we think the company can maintain.

Univest Financial Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the annual payment back then was $0.80, compared to the most recent full-year payment of $0.84. Its dividends have grown at less than 1% per annum over this time frame. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

Univest Financial May Find It Hard To Grow The Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Unfortunately, Univest Financial's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. If Univest Financial is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

We Really Like Univest Financial's Dividend

Overall, we like to see the dividend staying consistent, and we think Univest Financial might even raise payments in the future. 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.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. 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 Univest Financial analysts we track are forecasting continued growth with our free report on analyst estimates for the company. 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.