Yahoo Finance Laurentian Bank of Canada (TSE:LB) Is Due To Pay A Dividend Of CA$0.47
The board of Laurentian Bank of Canada (TSE:LB) has announced that it will pay a dividend on the 1st of May, with investors receiving CA$0.47 per share. The dividend yield will be 6.8% based on this payment which is still above the industry average.
View our latest analysis for Laurentian Bank of Canada
Laurentian Bank of Canada's Dividend Forecasted To Be Well Covered By Earnings
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.
Having distributed dividends for at least 10 years, Laurentian Bank of Canada has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 53%, which means that Laurentian Bank of Canada would be able to pay its last dividend without pressure on the balance sheet.
The next year is set to see EPS grow by 8.8%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 48% by next year, which is in a pretty sustainable range.
Dividend Volatility
The company has a long dividend track record, but it doesn't look great with cuts in the past. Since 2014, the dividend has gone from CA$1.96 total annually to CA$1.88. Dividend payments have shrunk at a rate of less than 1% per annum over this time frame. A company that decreases its dividend over time generally isn't what we are looking for.
Dividend Growth Is Doubtful
With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. It's not great to see that Laurentian Bank of Canada's earnings per share has fallen at approximately 5.0% per year over the past five years. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed. It's not all bad news though, as the earnings are predicted to rise over the next 12 months - we would just be a bit cautious until this can turn into a longer term trend.
Our Thoughts On Laurentian Bank of Canada's Dividend
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While Laurentian Bank of Canada is earning enough to cover the dividend, we are generally unimpressed with its future prospects. This company is not in the top tier of income providing stocks.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for Laurentian Bank of Canada that investors should know about before committing capital to this stock. 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.
