If you are interested in cashing in on CenterState Bank Corporation’s (NASDAQ:CSFL) upcoming dividend of US$0.11 per share, you only have 2 days left to buy the shares before its ex-dividend date, 14 March 2019, in time for dividends payable on the 29 March 2019. Is this future income a persuasive enough catalyst for investors to think about CenterState Bank as an investment today? Below, I’m going to look at the latest data and analyze the stock and its dividend property in further detail.
5 checks you should use to assess a dividend stock
If you are a dividend investor, you should always assess these five key metrics:
- Is it the top 25% annual dividend yield payer?
- Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
- Has dividend per share amount increased over the past?
- Does earnings amply cover its dividend payments?
- Will it have the ability to keep paying its dividends going forward?
How does CenterState Bank fare?
CenterState Bank has a trailing twelve-month payout ratio of 22%, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 22% which, assuming the share price stays the same, leads to a dividend yield of around 1.9%. Furthermore, EPS should increase to $2.04.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. In the case of CSFL it has increased its DPS from $0.16 to $0.44 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. These are all positive signs of a great, reliable dividend stock.
Relative to peers, CenterState Bank produces a yield of 1.7%, which is on the low-side for Banks stocks.
Considering the dividend attributes we analyzed above, CenterState Bank is definitely worth keeping an eye on for someone looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. I’ve put together three key factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for CSFL’s future growth? Take a look at our free research report of analyst consensus for CSFL’s outlook.
- Valuation: What is CSFL worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CSFL is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.