Enterprise Financial Services Corp (NASDAQ:EFSC) has announced an increase in its dividend, climbing from last year’s payment to $0.29 effective March 31st. This adjustment brings the annual yield to 2.0% based on the current stock price, which unfortunately lags behind industry standards.
Check out our most recent analysis of Enterprise Financial Services
While yield is a significant factor, it’s also critical to assess whether the company’s current payout levels are sustainable.
Enterprise Financial Services boasts a long legacy of dividend payouts, with a consistent track record extending at least 10 years. Although past performances do not guarantee future outcomes, the company’s payout ratio of 22% indicates that it can comfortably sustain its dividend payments.
Looking ahead, earnings per share (EPS) are projected to grow by 10.9% over the next three years. Analysts estimate that the payout ratio could remain at 22% during this period, which is a positive sign for the future dividend outlook.
Throughout its extensive history of dividend payments, the company has maintained impressive stability. In the last decade, the annual payment was $0.21 in 2015, and the latest fiscal year payment reached $1.16. This reflects a compound annual growth rate (CAGR) of about 19% over that span. The consistent upward trend in payments reassures us that future disbursements are likely to be reliable.
Investors of the company will be pleased by the steady dividend income. Enterprise Financial Services has achieved EPS growth of 6.6% per annum over the past five years. With sound growth and a low payout ratio, this bodes well for the company’s potential to continue increasing its dividend payments.
Overall, a dividend hike is always a positive development, and we believe Enterprise Financial Services stands out as a solid income stock, given its history and improving earnings. The payouts are well-supported by earnings, which convert into cash flows smoothly. Overall, this aligns with many of the characteristics we prioritize when selecting an income stock.
Market trends show a strong preference for companies with consistent dividend policies over those with less predictability. While dividend payments are crucial, they are not the only considerations for evaluating a company. Generally, earnings growth correlates positively with the future value of dividend payments. To see if the five analysts covering Enterprise Financial Services anticipate continued growth, check out our free report on analyst estimates for the company. If you’re a dividend investor, you might also want to explore our curated list of high yield dividend stocks.
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This article by Simply Wall St is intended for informational purposes only. We provide insights based on historical data and analyst forecasts without financial bias. Our content is not intended as investment advice. It does not constitute a recommendation to buy or sell any stock, and it does not consider your investment objectives or financial situation. Our aim is to deliver long-term focused analyses based on fundamental data. Please note that our assessments may not incorporate the latest price-sensitive company announcements or qualitative information. Simply Wall St does not hold positions in any mentioned stocks.
