Assessing the Sustainability and Growth of First United Corp's Dividend
First United Corp (FUNC, Financial) recently announced a dividend of $0.2 per share, payable on 2023-11-01, with the ex-dividend date set for 2023-10-17. As investors anticipate this forthcoming payment, the focus also turns to the company's dividend history, yield, and growth rates. Using data from GuruFocus, we delve into First United Corp's dividend performance and assess its sustainability.
Understanding First United Corp's Business
First United Corp operates in the financial services sector. Its services encompass checking, savings, money market deposit accounts, and certificates of deposit, along with business loans, personal loans, mortgage loans, and lines of credit extended to both individuals and businesses. Additionally, it offers safe deposit and night depository facilities, insurance products, and trust services. The bank also caters to residential real estate construction loans to builders and individuals for single-family dwellings.
First United Corp's Dividend History
Since 2018, First United Corp has maintained a regular dividend payment record, with dividends currently distributed on a quarterly basis. The following chart portrays the annual Dividends Per Share for tracking historical trends.
First United Corp's Dividend Yield and Growth
As of today, First United Corp posts a 12-month trailing dividend yield of 4.48% and a 12-month forward dividend yield of 4.91%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, First United Corp's annual dividend growth rate was 14.50%. Based on First United Corp's dividend yield and five-year growth rate, the 5-year yield on cost of First United Corp stock as of today is approximately 4.48%.
Assessing Dividend Sustainability: Payout Ratio and Profitability
The sustainability of a dividend is often gauged by the company's payout ratio. The dividend payout ratio offers insights into the proportion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, First United Corp's dividend payout ratio is 0.20.
First United Corp's profitability rank, as per GuruFocus, stands at 5 out of 10 as of 2023-06-30, indicating fair profitability. The company has reported positive net income each year over the past decade, further solidifying its high profitability.
First United Corp's Growth Metrics
A company must demonstrate robust growth metrics to ensure dividend sustainability. First United Corp's growth rank of 5 out of 10 suggests a fair growth outlook. First United Corp's revenue per share and the 3-year revenue growth rate indicate a strong revenue model. Its revenue has increased by approximately 8.20% per year on average, a rate that outperforms approximately 60.33% of global competitors.
The company's 3-year EPS growth rate highlights its ability to grow its earnings, a critical component for sustaining dividends in the long run. Over the past three years, First United Corp's earnings increased by approximately 26.70% per year on average, a rate that outperforms approximately 82.86% of global competitors. Lastly, the company's 5-year EBITDA growth rate stands at 38.60%, outperforming approximately 94.61% of global competitors.
Conclusion
First United Corp's consistent dividend payments, robust dividend growth rate, low payout ratio, and fair profitability and growth metrics make it an attractive option for dividend investors. However, like any investment, it's essential to conduct thorough research and consider the company's overall financial health before making a decision. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
