First Horizon (NYSE:FHN) Has Affirmed Its Dividend Of $0.15

First Horizon Corporation (NYSE:FHN) has announced that it will pay a dividend of $0.15 per share on the 1st of April. This means the dividend yield will be fairly typical at 3.2%.

View our latest analysis for First Horizon

First Horizon'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.

First Horizon has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on First Horizon's last earnings report, the payout ratio is at a decent 44%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, EPS is forecast to rise by 57.7% over the next 3 years. Analysts forecast the future payout ratio could be 30% over the same time horizon, which is a number we think the company can maintain.

First Horizon Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2015, the dividend has gone from $0.20 total annually to $0.60. This means that it has been growing its distributions at 12% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

First Horizon May Find It Hard To Grow The Dividend

Investors could be attracted to the stock based on the quality of its payment history. Unfortunately, First Horizon's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year. First Horizon is struggling to find viable investments, so it is returning more to shareholders. This could mean the dividend doesn't have the growth potential we look for going into the future.

We Really Like First Horizon's Dividend

Overall, we like to see the dividend staying consistent, and we think First Horizon might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 11 analysts we track are forecasting for First Horizon for free with public analyst estimates for the company. Is First Horizon not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.