First Commonwealth Financial Corporation (NYSE:FCF) Looks Interesting, And It's About To Pay A Dividend

First Commonwealth Financial Corporation (NYSE:FCF) stock is about to trade ex-dividend in three days. The ex-dividend date occurs one day before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Accordingly, First Commonwealth Financial investors that purchase the stock on or after the 8th of August will not receive the dividend, which will be paid on the 22nd of August.

The company's next dividend payment will be US$0.135 per share, and in the last 12 months, the company paid a total of US$0.54 per share. Calculating the last year's worth of payments shows that First Commonwealth Financial has a trailing yield of 3.3% on the current share price of US$16.33. If you buy this business for its dividend, you should have an idea of whether First Commonwealth Financial's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately First Commonwealth Financial's payout ratio is modest, at just 40% of profit.

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.

Check out our latest analysis for First Commonwealth Financial

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it's a relief to see First Commonwealth Financial earnings per share are up 3.6% per annum over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, First Commonwealth Financial has lifted its dividend by approximately 6.8% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

To Sum It Up

Has First Commonwealth Financial got what it takes to maintain its dividend payments? First Commonwealth Financial 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. Overall, First Commonwealth Financial looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

Wondering what the future holds for First Commonwealth Financial? See what the six analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

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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.