CVB Financial Corp: A Deep Dive into its Dividend Performance and Sustainability
Unpacking the dividend history, yield, growth, and future prospects of CVB Financial Corp (NASDAQ:CVBF)
CVB Financial Corp (NASDAQ:CVBF) recently announced a dividend of $0.2 per share, payable on 2023-10-19, with the ex-dividend date set for 2023-10-03. 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 deep dive into CVB Financial Corp's dividend performance and assess its sustainability.
Understanding CVB Financial Corp's Business
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CVB Financial Corp is the holding company for Citizens Business Bank. Citizens Business Bank offers banking, lending, and investing services through approximately 58 banking centers and three trust office locations serving the Inland Empire, Los Angeles County, Orange County, San Diego County, Ventura County, Santa Barbara County, and the Central Valley area of California.
CVB Financial Corp's Dividend History
CVB Financial Corp has maintained a consistent dividend payment record since 1989. Dividends are currently distributed on a quarterly basis. CVB Financial Corp has increased its dividend each year since 1993, earning the title of a dividend aristocrat, an honor bestowed upon companies that have consistently increased their dividend each year for at least the past 30 years.
CVB Financial Corp's Dividend Yield and Growth
As of today, CVB Financial Corp currently has a 12-month trailing dividend yield of 4.98% and a 12-month forward dividend yield of 4.98%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, CVB Financial Corp's annual dividend growth rate was 2.30%. Extended to a five-year horizon, this rate increased to 7.50% per year. And over the past decade, CVB Financial Corp's annual dividends per share growth rate stands at 8.80%.
Based on CVB Financial Corp's dividend yield and five-year growth rate, the 5-year yield on cost of CVB Financial Corp stock as of today is approximately 7.15%.
Assessing the Sustainability of CVB Financial Corp's Dividends
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 2023-06-30, CVB Financial Corp's dividend payout ratio is 0.46.
CVB Financial Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks CVB Financial Corp's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
CVB Financial Corp's Growth Metrics and Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. CVB Financial Corp's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and CVB Financial Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. CVB Financial Corp's revenue has increased by approximately 4.50% per year on average, a rate that underperforms than approximately 60.92% 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, CVB Financial Corp's earnings increased by approximately 4.10% per year on average, a rate that underperforms than approximately 64.71% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.10%, which underperforms than approximately 44.37% of global competitors.
Concluding Thoughts
CVB Financial Corp's consistent dividend payments, moderate growth rate, and a reasonable payout ratio, coupled with its profitability and growth metrics, suggest a sustainable dividend model. While its revenue and earnings growth rates may not be the highest among its peers, CVB Financial Corp's long history of dividends and its profitability rank indicate a company that prioritizes returning value to its shareholders. However, investors should continue to monitor these factors to ensure the sustainability of the dividends.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article first appeared on GuruFocus.
