Provident Financial Services (NYSE:PFS) Is Paying Out A Dividend Of $0.24

Provident Financial Services, Inc. (NYSE:PFS) will pay a dividend of $0.24 on the 24th of February. This payment means the dividend yield will be 4.2%, which is below the average for the industry.

View our latest analysis for Provident Financial Services

Provident Financial Services' Earnings Will Easily Cover The Distributions

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.

Provident Financial Services has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Provident Financial Services' payout ratio of 41% is a good sign as this means that earnings decently cover dividends.

Over the next year, EPS could expand by 10.1% if recent trends continue. The future payout ratio is also estimated by analysts to be at 35%in 3 years, which will be quite a comfortable range for most investors.

Provident Financial Services Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the dividend has gone from $0.52 total annually to $0.96. This means that it has been growing its distributions at 6.3% per annum over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Provident Financial Services has impressed us by growing EPS at 10% per year over the past five years. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

Provident Financial Services Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. As an example, we've identified 1 warning sign for Provident Financial Services that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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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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