Commerce Bancshares Inc's Dividend Analysis
An In-Depth Look at CBSH's Upcoming Dividend and Historical Performance
Commerce Bancshares Inc(NASDAQ:CBSH) recently announced a dividend of $0.27 per share, payable on 2023-12-18, with the ex-dividend date set for 2023-12-01. 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 Commerce Bancshares Inc's dividend performance and assess its sustainability.
What Does Commerce Bancshares Inc Do?
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Commerce Bancshares Inc. is a $22 billion regional bank that provides a diversified line of financial services, including business and personal banking, wealth management, financial planning, and investments through its affiliated companies. Commerce Bank operates in more than 200 locations in the central United States. Commerce Bancshares also has operating subsidiaries involved in mortgage banking, leasing, credit-related insurance, venture capital, and real estate activities.
A Glimpse at Commerce Bancshares Inc's Dividend History
Commerce Bancshares Inc has maintained a consistent dividend payment record since 1969. Dividends are currently distributed on a quarterly basis. Commerce Bancshares Inc has increased its dividend each year since 1969. The stock is thus listed as a dividend king, an honor that is given to companies that have increased their dividend each year for at least the past 54 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Commerce Bancshares Inc's Dividend Yield and Growth
As of today, Commerce Bancshares Inc currently has a 12-month trailing dividend yield of 2.10% and a 12-month forward dividend yield of 2.11%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Commerce Bancshares Inc's annual dividend growth rate was 6.10%. Extended to a five-year horizon, this rate increased to 9.00% per year. And over the past decade, Commerce Bancshares Inc's annual dividends per share growth rate stands at 7.20%. Based on Commerce Bancshares Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Commerce Bancshares Inc stock as of today is approximately 3.23%.
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, Commerce Bancshares Inc's dividend payout ratio is 0.27.
Commerce Bancshares Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Commerce Bancshares Inc's profitability 6 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported positive net income for each 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. Commerce Bancshares Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Commerce Bancshares Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Commerce Bancshares Inc's revenue has increased by approximately 5.60% per year on average, a rate that underperforms approximately 53.51% 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, Commerce Bancshares Inc's earnings increased by approximately 7.50% per year on average, a rate that underperforms approximately 52.64% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.00%, which underperforms approximately 43.73% of global competitors.
Next Steps
Considering Commerce Bancshares Inc's longstanding history as a dividend king, its consistent dividend growth rate, and a prudent payout ratio, the company presents a reliable dividend profile for value investors. The profitability and growth metrics, although not leading the industry, show a stable financial foundation, which supports the continuation of dividend payments. As long-term investors contemplate adding CBSH to their portfolios, they should also consider the company's ability to navigate future economic cycles and maintain its dividend king status. With a forward-looking approach and an eye on sustainability, Commerce Bancshares Inc remains a noteworthy candidate for dividend-focused investment strategies.
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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.
