Central Pacific Financial (NYSE:CPF) Is Due To Pay A Dividend Of $0.26
The board of Central Pacific Financial Corp. (NYSE:CPF) has announced that it will pay a dividend on the 15th of June, with investors receiving $0.26 per share. Based on this payment, the dividend yield on the company's stock will be 6.5%, which is an attractive boost to shareholder returns.
View our latest analysis for Central Pacific Financial
Central Pacific Financial's Earnings Will Easily Cover The Distributions
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.
Central Pacific Financial has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Central Pacific Financial's last earnings report, the payout ratio is at a decent 40%, meaning that the company is able to pay out its dividend with a bit of room to spare.
EPS is set to fall by 8.4% over the next 12 months. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 47%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
Central Pacific Financial Has A Solid Track Record
The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.32 in 2013, and the most recent fiscal year payment was $1.04. This implies that the company grew its distributions at a yearly rate of about 13% over that duration. 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 Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. Central Pacific Financial has seen EPS rising for the last five years, at 13% per annum. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.
We Really Like Central Pacific Financial's Dividend
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All of these factors considered, we think this has solid potential as a dividend stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Central Pacific Financial that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield 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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