Community West Bancshares' (NASDAQ:CWBC) Dividend Will Be $0.075
The board of Community West Bancshares (NASDAQ:CWBC) has announced that it will pay a dividend on the 30th of November, with investors receiving $0.075 per share. Including this payment, the dividend yield on the stock will be 2.1%, which is a modest boost for shareholders' returns.
See our latest analysis for Community West Bancshares
Community West Bancshares' Payment Expected To Have Solid Earnings Coverage
While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.
Community West Bancshares has a good history of paying out dividends, with its current track record at 8 years. Using data from its latest earnings report, Community West Bancshares' payout ratio sits at 19%, an extremely comfortable number that shows that it can pay its dividend.
Looking forward, earnings per share is forecast to rise by 6.0% over the next year. Assuming the dividend continues along recent trends, we think the future payout ratio could be 21% by next year, which is in a pretty sustainable range.
Community West Bancshares Doesn't Have A Long Payment History
Community West Bancshares' dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2014, the annual payment back then was $0.08, compared to the most recent full-year payment of $0.30. This means that it has been growing its distributions at 18% per annum over that time. It is always nice to see strong dividend growth, but with such a short payment history we wouldn't be inclined to rely on it until a longer track record can be developed.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Community West Bancshares has seen EPS rising for the last five years, at 16% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Community West Bancshares' prospects of growing its dividend payments in the future.
We Really Like Community West Bancshares' Dividend
Overall, we like to see the dividend staying consistent, and we think Community West 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.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Community West Bancshares that investors should know about before committing capital to this stock. 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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