Investors who want to cash in on First National Financial Corporation’s (TSX:FN) upcoming dividend of CA$0.15 per share have only 3 days left to buy the shares before its ex-dividend date, 28 December 2017, in time for dividends payable on the 15 January 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding First National Financial can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. See our latest analysis for First National Financial
What Is A Dividend Rock Star?
It is a stock that pays a stable and consistent dividend, having done so reliably for the past decade with the expectation of this continuing into the future. More specifically: Its annual yield is among the top 25% of dividend payers It has paid dividend every year without dramatically reducing payout in the past Its dividend per share amount has increased over the past It is able to pay the current rate of dividends from its earnings It is able to continue to payout at the current rate in the future
High Yield And Dependable
First National Financial’s yield sits at 6.55%, which is high for mortgage stocks. But the real reason First National Financial stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you’re investor who wants a robust cash inflow from your portfolio over a long period of time.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. FN has increased its DPS from CA$1.25 to CA$1.85 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock. The current payout ratio for the stock is 46.40%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 68.13%, leading to a dividend yield of 6.97%. However, EPS is forecasted to fall to CA$2.99 in the upcoming year. Therefore, although payout is expected to increase, the fall in earnings may not equate to higher dividend income.
What this means for you:
Are you a shareholder? Investors of First National Financial can continue to expect strong dividends from the stock. With its favorable dividend characteristics, if high income generation is still the goal for your portfolio, then First National Financial is one worth keeping around. However, depending on your current portfolio, it may be worth exploring other dividend stocks to enhance your diversification, or even look at high-growth stocks to supplement your steady income stocks. I recommend continuing your research by taking a look at my interactive free list of dividend rockstars as well as high-growth stocks to potentially add to your holdings.