Cathay General Bancorp's Dividend Analysis
Insights on Cathay General Bancorp's Upcoming Dividend Payment
Cathay General Bancorp (NASDAQ:CATY) recently announced a dividend of $0.34 per share, payable on 2023-12-11, with the ex-dividend date set for 2023-11-28. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Cathay General Bancorp's dividend performance and assess its sustainability.
What Does Cathay General Bancorp Do?
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Cathay General Bancorp is a regional bank primarily serving the Chinese-American community. With more than 45 branches and three international representative offices, the bank provides traditional loan and deposit products, as well as international trade-related services to individuals and small to midsize businesses. The Bank accepts checking, savings, and time deposits, and makes commercial, real estate, personal, home improvement, automobile, and other installment and term loans. The Bank also provides letters of credit, safe deposit, Social Security payment deposit, bank-by-mail, Internet banking services, and other customary banking services.
A Glimpse at Cathay General Bancorp's Dividend History
Cathay General Bancorp has maintained a consistent dividend payment record since 1991. Dividends are currently distributed on a quarterly basis.
Cathay General Bancorp has increased its dividend each year since 2010. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 13 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Cathay General Bancorp's Dividend Yield and Growth
As of today, Cathay General Bancorp currently has a 12-month trailing dividend yield of 3.71% and a 12-month forward dividend yield of 3.71%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Cathay General Bancorp's annual dividend growth rate was 3.10%. Extended to a five-year horizon, this rate increased to 8.50% per year. And over the past decade, Cathay General Bancorp's annual dividends per share growth rate stands at an impressive 37.40%.
Based on Cathay General Bancorp's dividend yield and five-year growth rate, the 5-year yield on cost of Cathay General Bancorp stock as of today is approximately 5.58%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Cathay General Bancorp's dividend payout ratio is 0.27.
Cathay General Bancorp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Cathay General Bancorp's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Cathay General Bancorp's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Cathay General Bancorp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Cathay General Bancorp's revenue has increased by approximately 11.10% per year on average, a rate that outperforms approximately 72.45% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Cathay General Bancorp's earnings increased by approximately 11.90% per year on average, a rate that outperforms approximately 60.53% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 13.00%, which outperforms approximately 66.61% of global competitors, demonstrates strong potential for future profitability and dividend sustainability.
Next Steps
In conclusion, Cathay General Bancorp's consistent dividend payments, impressive dividend growth rate, manageable payout ratio, and robust profitability and growth metrics make it an attractive consideration for value investors focused on income generation. The bank's strong financial health and positive growth outlook provide reassurance for the sustainability of its dividends, a critical aspect for long-term investment strategies. As investors anticipate the upcoming dividend payment, they may also explore the potential for long-term value appreciation within Cathay General Bancorp's shares.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
