Commerce Bancshares (NASDAQ:CBSH) Has Affirmed Its Dividend Of $0.265
The board of Commerce Bancshares, Inc. (NASDAQ:CBSH) has announced that it will pay a dividend of $0.265 per share on the 16th of December. Including this payment, the dividend yield on the stock will be 1.5%, which is a modest boost for shareholders' returns.
View our latest analysis for Commerce Bancshares
Commerce Bancshares' Payment Expected To Have Solid Earnings Coverage
If it is predictable over a long period, even low dividend yields can be attractive.
Commerce Bancshares has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 27%, which means that Commerce Bancshares would be able to pay its last dividend without pressure on the balance sheet.
The next 3 years are set to see EPS grow by 11.4%. Analysts estimate the future payout ratio will be 28% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
Commerce Bancshares 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 $0.538 in 2012, and the most recent fiscal year payment was $1.06. This implies that the company grew its distributions at a yearly rate of about 7.0% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that Commerce Bancshares has been growing its earnings per share at 12% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
Commerce Bancshares Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think Commerce Bancshares might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Commerce Bancshares that investors should take into consideration. Is Commerce Bancshares not quite the opportunity you were looking for? Why not check out our selection of top 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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