City Holding Co's Dividend Analysis
An In-depth Look at the Company's Dividend History, Yield, Growth, and Sustainability
City Holding Co(NASDAQ:CHCO) recently announced a dividend of $0.72 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-12. 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 delve into City Holding Co's dividend performance and assess its sustainability.
What Does City Holding Co Do?
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City Holding Co is a financial holding company providing banking, trust and investment management, and other financial solutions through its network of banking offices located in the states of West Virginia, Virginia, southeastern Ohio and Kentucky. Its diverse offerings include overdraft facilities, saving accounts, credit card and debit cards, loans for various purposes, investment advisory, securities brokerage, insurance, technology products, and more. These products and services cater to commercial banking, consumer banking, mortgage banking, wealth management, and trust services.
A Glimpse at City Holding Co's Dividend History
City Holding Co has upheld a consistent dividend payment record since 2002, with dividends currently distributed on a quarterly basis. The company has increased its dividend each year since 2002, earning it the title of a dividend achiever, a distinction conferred to companies that have increased their dividend each year for at least the past 21 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down City Holding Co's Dividend Yield and Growth
As of today, City Holding Co has a 12-month trailing dividend yield of 2.79% and a 12-month forward dividend yield of 3.08%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, the company's annual dividend growth rate was 4.30%. Extended to a five-year horizon, this rate increased to 6.90% per year. Over the past decade, City Holding Co's annual dividends per share growth rate stands at 6.00%. Based on these metrics, the 5-year yield on cost of City Holding Co stock as of today is approximately 3.89%.
The Sustainability Question: Payout Ratio and Profitability
Assessing the sustainability of the dividend requires an evaluation of 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 2023-06-30, City Holding Co's dividend payout ratio is 0.33. Furthermore, City Holding Co's profitability rank of 6 out of 10 suggests fair profitability, with positive net income reported for each year over the past decade.
Growth Metrics: The Future Outlook
For dividends to be sustainable, a company must demonstrate robust growth metrics. City Holding Co's growth rank of 6 out of 10 suggests a fair growth outlook. The company's revenue per share and 3-year revenue growth rate indicate a strong revenue model, with revenue increasing by approximately 6.40% per year on average. City Holding Co's 3-year EPS growth rate of approximately 7.90% per year on average showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. Lastly, the company's 5-year EBITDA growth rate stands at 12.30%.
Conclusion
City Holding Co's consistent dividend payments, coupled with its robust dividend growth rate, low payout ratio, and fair profitability and growth metrics, make it an attractive proposition for dividend-focused investors. As the company continues to grow its earnings and maintain a healthy payout ratio, the sustainability of its dividends seems promising. However, investors are advised to keep an eye on the company's growth metrics and profitability to ensure continued dividend payouts.
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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.
