Bank of the James Financial Group (NASDAQ: BOTJ) announced it will distribute a dividend of $0.08 per share on December 8th, yielding an annual return of 3.2%, below industry standards. The firm has a nine-year consistent record of dividends and a current payout ratio of 17%, demonstrating its capacity to sustain these dividends. If the current trend continues, there could be a 16.7% EPS growth over the next year, potentially reducing the payout ratio to 16%. The company's yearly dividend payment has increased from $0.182 in 2014 to $0.32 now, reflecting an annual growth rate of 6.5%. Despite this growth, some investors may need a longer performance history before including this in their income portfolio.
On the same day, Franklin Financial Services Corporation (NASDAQ: FRAF) revealed plans to pay a dividend of $0.32 per share on November 22, amounting to 4.3% of its current stock price, which aligns with industry norms. The company has consistently grown dividends at an annual rate of 6.5%, from $0.68 in 2013 to $1.28 recently. Its latest earnings report shows a sustainable payout ratio of 38%, indicating the firm's ability to comfortably cover dividend payouts. With a five-year track record of growing earnings per share by 16% annually and the potential for a further 16.1% rise next year, the payout ratio could decrease to 35%. This combination of stable dividends, robust earnings growth, and a reduced payout ratio suggests that Franklin Financial Services' dividends are poised for future growth, making it an attractive income stock.
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