Commerce Bancshares (NASDAQ:CBSH) Has Announced A Dividend Of $0.265
Commerce Bancshares, Inc. (NASDAQ:CBSH) will pay a dividend of $0.265 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' Dividend Forecasted To Be Well Covered By Earnings
The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.
Commerce Bancshares has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Commerce Bancshares' last earnings report, the payout ratio is at a decent 27%, meaning that the company is able to pay out its dividend with a bit of room to spare.
The next 3 years are set to see EPS grow by 11.3%. The future payout ratio could be 28% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Commerce Bancshares Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The dividend has gone from an annual total of $0.538 in 2012 to the most recent total annual payment of $1.06. This means that it has been growing its distributions at 7.0% per annum over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend 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. With a decent amount of growth and a low payout ratio, we think this bodes well for Commerce Bancshares' prospects of growing its dividend payments in the future.
Commerce Bancshares Looks Like A Great Dividend Stock
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. 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. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Commerce Bancshares that investors should know about before committing capital to this stock. 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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