Yahoo Finance Cullen/Frost Bankers, Inc. (NYSE:CFR) Passed Our Checks, And It's About To Pay A US$0.87 Dividend
It looks like Cullen/Frost Bankers, Inc. (NYSE:CFR) is about to go ex-dividend in the next 4 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. In other words, investors can purchase Cullen/Frost Bankers' shares before the 30th of May in order to be eligible for the dividend, which will be paid on the 15th of June.
The company's next dividend payment will be US$0.87 per share, and in the last 12 months, the company paid a total of US$3.48 per share. Calculating the last year's worth of payments shows that Cullen/Frost Bankers has a trailing yield of 3.4% on the current share price of $103. If you buy this business for its dividend, you should have an idea of whether Cullen/Frost Bankers's dividend is reliable and sustainable. So we need to investigate whether Cullen/Frost Bankers can afford its dividend, and if the dividend could grow.
Check out our latest analysis for Cullen/Frost Bankers
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Cullen/Frost Bankers paid out a comfortable 33% of its profit last year.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. For this reason, we're glad to see Cullen/Frost Bankers's earnings per share have risen 12% per annum over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last 10 years, Cullen/Frost Bankers has lifted its dividend by approximately 6.1% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
Final Takeaway
Is Cullen/Frost Bankers an attractive dividend stock, or better left on the shelf? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. In summary, Cullen/Frost Bankers appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
While it's tempting to invest in Cullen/Frost Bankers for the dividends alone, you should always be mindful of the risks involved. To help with this, we've discovered 1 warning sign for Cullen/Frost Bankers that you should be aware of before investing in their shares.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are 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.
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