First National Financial Corporation (TSE: FN) has announced an increase in its dividend to CA$0.20 per share, payable on November 15th. The new dividend offers an annual yield of 6.9%, which surpasses industry standards. This comes after the company demonstrated that its earnings sufficiently covered its last dividend, indicating a significant reinvestment of profits back into its operations.
The corporation is anticipating an EPS growth of 36.8% for the next year and estimates a payout ratio of about 55% based on recent dividend trends, suggesting the sustainability of dividends is likely assured. This follows a consistent trend of paying dividends by the company, which has seen an increase from CA$1.3 in 2013 to CA$2.40 recently, reflecting a compound annual growth rate (CAGR) of approximately 6.3%.
However, over the past half-decade, First National Financial has experienced only a modest annual EPS growth rate of 2.2%. This suggests potentially limited investment opportunities and a focus on returning earnings to shareholders. Despite this slower growth rate, the company's steady dividend increases and anticipated EPS growth indicate a positive outlook for shareholder returns in the coming year.
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