First Commonwealth Financial (NYSE:FCF) Will Pay A Dividend Of $0.135

First Commonwealth Financial Corporation (NYSE:FCF) has announced that it will pay a dividend of $0.135 per share on the 21st of November. Based on this payment, the dividend yield will be 3.5%, which is fairly typical for the industry.

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First Commonwealth Financial's Dividend Forecasted To Be Well Covered By Earnings

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

First Commonwealth 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 First Commonwealth Financial's payout ratio of 39% is a good sign as this means that earnings decently cover dividends.

Over the next 3 years, EPS is forecast to expand by 53.1%. Analysts estimate the future payout ratio will be 31% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for First Commonwealth Financial

First Commonwealth Financial Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was $0.28, compared to the most recent full-year payment of $0.54. This works out to be a compound annual growth rate (CAGR) of approximately 6.8% a year over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. First Commonwealth Financial has seen EPS rising for the last five years, at 13% per annum. First Commonwealth Financial definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like First Commonwealth Financial's Dividend

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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. Earnings growth generally bodes well for the future value of company dividend payments. See if the 5 First Commonwealth 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.