Civista Bancshares (NASDAQ:CIVB) Is Paying Out A Larger Dividend Than Last Year
The board of Civista Bancshares, Inc. (NASDAQ:CIVB) has announced that it will be paying its dividend of $0.16 on the 22nd of August, an increased payment from last year's comparable dividend. This makes the dividend yield about the same as the industry average at 3.3%.
See our latest analysis for Civista Bancshares
Civista Bancshares' Earnings Will Easily Cover The Distributions
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
Civista Bancshares has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. While past data isn't a guarantee for the future, Civista Bancshares' latest earnings report puts its payout ratio at 19%, showing that the company can pay out its dividends comfortably.
EPS is set to fall by 9.0% over the next 12 months. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 26%, which would be comfortable for the company to continue in the future.
Civista Bancshares Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.12 in 2013 to the most recent total annual payment of $0.60. This means that it has been growing its distributions at 17% per annum over that time. 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
The company's investors will be pleased to have been receiving dividend income for some time. Civista Bancshares has seen EPS rising for the last five years, at 12% per annum. Civista Bancshares definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Civista Bancshares Looks Like A Great Dividend Stock
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All of these factors considered, we think this has solid potential as a dividend stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 1 warning sign for Civista Bancshares that investors need to be conscious of moving forward. 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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