Yahoo Finance Cadence Bank (NYSE:CADE) Is Increasing Its Dividend To $0.235
Cadence Bank (NYSE:CADE) will increase its dividend on the 3rd of April to $0.235, which is 6.8% higher than last year's payment from the same period of $0.22. This takes the annual payment to 3.4% of the current stock price, which is about average for the industry.
View our latest analysis for Cadence Bank
Cadence Bank's Dividend Forecasted To Be Well Covered By Earnings
We aren't too impressed by dividend yields unless they can be sustained over time.
Having distributed dividends for at least 10 years, Cadence Bank has a long history of paying out a part of its earnings to shareholders. Based on Cadence Bank's last earnings report, the payout ratio is at a decent 48%, meaning that the company is able to pay out its dividend with a bit of room to spare.
The next 3 years are set to see EPS grow by 42.6%. The future payout ratio could be 29% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Cadence Bank Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $0.04 in 2013 to the most recent total annual payment of $0.88. This means that it has been growing its distributions at 36% per annum over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
The Dividend's Growth Prospects Are Limited
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Although it's important to note that Cadence Bank's earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time. Cadence Bank is struggling to find viable investments, so it is returning more to shareholders. This isn't bad in itself, but unless earnings growth pick up we wouldn't expect dividends to grow either.
We Really Like Cadence Bank's Dividend
Overall, a dividend increase is always good, and we think that Cadence Bank is a strong income stock thanks to its track record and growing earnings. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Cadence Bank that investors should take into consideration. Is Cadence Bank not quite the opportunity you were looking for? Why not check out our selection of top 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.
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