Yahoo Finance Community Bank System's (NYSE:CBU) Shareholders Will Receive A Bigger Dividend Than Last Year
The board of Community Bank System, Inc. (NYSE:CBU) has announced that it will be paying its dividend of $0.44 on the 10th of October, an increased payment from last year's comparable dividend. The payment will take the dividend yield to 2.6%, which is in line with the average for the industry.
See our latest analysis for Community Bank System
Community Bank System's Earnings Will Easily Cover The Distributions
We aren't too impressed by dividend yields unless they can be sustained over time.
Community Bank System has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Community Bank System's payout ratio of 53% is a good sign as this means that earnings decently cover dividends.
The next 3 years are set to see EPS grow by 32.0%. The future payout ratio could be 44% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Community Bank System Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2012, the annual payment back then was $1.04, compared to the most recent full-year payment of $1.76. This implies that the company grew its distributions at a yearly rate of about 5.4% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
Community Bank System Could Grow Its Dividend
The company's investors will be pleased to have been receiving dividend income for some time. Community Bank System has impressed us by growing EPS at 9.0% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.
We Really Like Community Bank System's Dividend
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Community Bank System that investors should know about before committing capital to this stock. Is Community Bank System 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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