Yahoo Finance Here's What We Like About Civista Bancshares' (NASDAQ:CIVB) Upcoming Dividend
Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Civista Bancshares, Inc. (NASDAQ:CIVB) is about to go ex-dividend in just four days. You can purchase shares before the 19th of October in order to receive the dividend, which the company will pay on the 2nd of November.
Civista Bancshares's next dividend payment will be US$0.11 per share, and in the last 12 months, the company paid a total of US$0.44 per share. Looking at the last 12 months of distributions, Civista Bancshares has a trailing yield of approximately 3.2% on its current stock price of $13.7. If you buy this business for its dividend, you should have an idea of whether Civista Bancshares's dividend is reliable and sustainable. As a result, readers should always check whether Civista Bancshares has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for Civista Bancshares
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. Civista Bancshares has a low and conservative payout ratio of just 24% of its income after tax.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see Civista Bancshares's earnings per share have risen 13% per annum over the last five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, Civista Bancshares has lifted its dividend by approximately 5.8% a year on average. Earnings per share have been growing much quicker than dividends, potentially because Civista Bancshares is keeping back more of its profits to grow the business.
The Bottom Line
Is Civista Bancshares an attractive dividend stock, or better left on the shelf? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. We think this is a pretty attractive combination, and would be interested in investigating Civista Bancshares more closely.
While it's tempting to invest in Civista Bancshares for the dividends alone, you should always be mindful of the risks involved. Every company has risks, and we've spotted 3 warning signs for Civista Bancshares (of which 1 is significant!) you should know about.
If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. 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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