Yahoo Finance Commerce Bancshares (NASDAQ:CBSH) Has Affirmed Its Dividend Of $0.27
Commerce Bancshares, Inc.'s (NASDAQ:CBSH) investors are due to receive a payment of $0.27 per share on 18th of June. Including this payment, the dividend yield on the stock will be 1.9%, which is a modest boost for shareholders' returns.
Check out our latest analysis for Commerce Bancshares
Commerce Bancshares' Earnings Will Easily Cover The Distributions
If it is predictable over a long period, even low dividend yields can be attractive.
Commerce Bancshares has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Commerce Bancshares' last earnings report, the payout ratio is at a decent 29%, meaning that the company is able to pay out its dividend with a bit of room to spare.
The next year is set to see EPS grow by 14.8%. If the dividend continues along recent trends, we estimate the future payout ratio will be 28%, which is in the range that makes us comfortable with the sustainability of the dividend.
Commerce Bancshares Has A Solid Track Record
The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.526 in 2014, and the most recent fiscal year payment was $1.08. This means that it has been growing its distributions at 7.5% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
Dividend Growth May Be Hard To Achieve
The company's investors will be pleased to have been receiving dividend income for some time. Earnings have grown at around 4.0% a year for the past five years, which isn't massive but still better than seeing them shrink. If Commerce Bancshares is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.
Commerce Bancshares Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Case in point: We've spotted 2 warning signs for Commerce Bancshares (of which 1 is concerning!) you should know about. 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.
