• Mon. May 20th, 2024

Income Investors Should Know That Citizens Financial Services, Inc. (NASDAQ:CZFS) Goes Ex-Dividend Soon

Citizens Financial Services, Inc. (NASDAQ:CZFS) stock is about to trade ex-dividend in four days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Therefore, if you purchase Citizens Financial Services’ shares on or after the 14th of March, you won’t be eligible to receive the dividend, when it is paid on the 29th of March.

The company’s next dividend payment will be US$0.49 per share, and in the last 12 months, the company paid a total of US$1.96 per share. Based on the last year’s worth of payments, Citizens Financial Services has a trailing yield of 4.6% on the current stock price of US$42.845. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it’s growing.

See our latest analysis for Citizens Financial Services

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. That’s why it’s good to see Citizens Financial Services paying out a modest 48% of its earnings.

Generally speaking, the lower a company’s payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit Citizens Financial Services paid out over the last 12 months.

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NasdaqCM:CZFS Historic Dividend March 9th 2024

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Citizens Financial Services’s earnings per share have fallen at approximately 5.0% a year over the previous five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.

Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Citizens Financial Services has increased its dividend at approximately 7.5% a year on average.

Final Takeaway

Should investors buy Citizens Financial Services for the upcoming dividend? Earnings per share have shrunk noticeably in recent years, although we like that the company has a low payout ratio. This could suggest a cut to the dividend may not be a major risk in the near future. We’re unconvinced on the company’s merits, and think there might be better opportunities out there.

If you want to look further into Citizens Financial Services, it’s worth knowing the risks this business faces. In terms of investment risks, we’ve identified 3 warning signs with Citizens Financial Services and understanding them should be part of your investment process.

If you’re in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

Valuation is complex, but we’re helping make it simple.

Find out whether Citizens Financial Services is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.

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