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Here's What We Like About City Holding Company (NASDAQ:CHCO)'s Upcoming Dividend

Simply Wall St

City Holding Company (NASDAQ:CHCO) is about to trade ex-dividend in the next 3 days. You will need to purchase shares before the 11th of October to receive the dividend, which will be paid on the 31st of October.

City Holding's next dividend payment will be US$0.6 per share. Last year, in total, the company distributed US$2.1 to shareholders. Looking at the last 12 months of distributions, City Holding has a trailing yield of approximately 3.0% on its current stock price of $74.92. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether City Holding has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for City Holding

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. City Holding paid out a comfortable 45% of its profit last year.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

NasdaqGS:CHCO Historical Dividend Yield, October 7th 2019
NasdaqGS:CHCO Historical Dividend Yield, October 7th 2019

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're encouraged by the steady growth at City Holding, with earnings per share up 9.0% on average over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, ten years ago, City Holding has lifted its dividend by approximately 5.3% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

To Sum It Up

From a dividend perspective, should investors buy or avoid City Holding? City Holding has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. We think this is a pretty attractive combination, and would be interested in investigating City Holding more closely.

Wondering what the future holds for City Holding? See what the four analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.