Central Pacific Financial (NYSE:CPF) Will Pay A Dividend Of $0.26
Central Pacific Financial Corp. (NYSE:CPF) has announced that it will pay a dividend of $0.26 per share on the 15th of March. This makes the dividend yield 5.4%, which will augment investor returns quite nicely.
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.
Having distributed dividends for at least 10 years, Central Pacific Financial has a long history of paying out a part of its earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Central Pacific Financial's payout ratio of 48% is a good sign as this means that earnings decently cover dividends.
The next 3 years are set to see EPS grow by 3.9%. Analysts estimate the future payout ratio will be 48% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
Central Pacific Financial Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was $0.32 in 2014, and the most recent fiscal year payment was $1.04. This works out to be a compound annual growth rate (CAGR) of approximately 13% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
Central Pacific Financial May Find It Hard To Grow The Dividend
The company's investors will be pleased to have been receiving dividend income for some time. However, Central Pacific Financial's EPS was effectively flat over the past five years, which could stop the company from paying more every year. The company has been growing at a pretty soft 1.4% per annum, and is paying out quite a lot of its earnings to shareholders. This isn't bad in itself, but unless earnings growth pick up we wouldn't expect dividends to grow either.
Central Pacific Financial Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Central Pacific Financial might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.
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. Now, if you want to look closer, it would be worth checking out our free research on Central Pacific Financial management tenure, salary, and performance. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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