Univest Financial's (NASDAQ:UVSP) Dividend Will Be $0.21

The board of Univest Financial Corporation (NASDAQ:UVSP) has announced that it will pay a dividend of $0.21 per share on the 22nd of May. Based on this payment, the dividend yield on the company's stock will be 4.0%, which is an attractive boost to shareholder returns.

See our latest analysis for Univest Financial

Univest Financial's Payment Expected To Have Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.

Univest Financial has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Univest Financial's last earnings report, the payout ratio is at a decent 35%, meaning that the company is able to pay out its dividend with a bit of room to spare.

EPS is set to fall by 9.8% over the next 12 months. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 39%, which would be comfortable for the company to continue in the future.

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Univest Financial Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from $0.80 total annually to $0.84. Its dividends have grown at less than 1% per annum over this time frame. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

We Could See Univest Financial's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. Univest Financial has seen EPS rising for the last five years, at 5.4% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

We Really Like Univest Financial's Dividend

Overall, we like to see the dividend staying consistent, and we think Univest Financial might even raise payments in the future. The earnings easily cover the company's distributions, and the company is generating plenty of cash. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 1 warning sign for Univest Financial that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.