Here's Why We're Wary Of Buying Cadence Bancorporation's (NYSE:CADE) For Its Upcoming Dividend
Cadence Bancorporation (NYSE:CADE) is about to trade ex-dividend in the next four days. You will need to purchase shares before the 4th of February to receive the dividend, which will be paid on the 12th of February.
Cadence Bancorporation's next dividend payment will be US$0.15 per share, on the back of last year when the company paid a total of US$0.60 to shareholders. Based on the last year's worth of payments, Cadence Bancorporation has a trailing yield of 3.3% on the current stock price of $17.92. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Cadence Bancorporation has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for Cadence Bancorporation
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Cadence Bancorporation paid a dividend last year despite being unprofitable. This might be a one-off event, but it's not a sustainable state of affairs in the long run.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Cadence Bancorporation reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last three years, Cadence Bancorporation has lifted its dividend by approximately 6.3% a year on average.
We update our analysis on Cadence Bancorporation every 24 hours, so you can always get the latest insights on its financial health, here.
To Sum It Up
Should investors buy Cadence Bancorporation for the upcoming dividend? First, it's not great to see the company paying a dividend despite being loss-making over the last year. Worse, the general trend in its earnings looks negative in recent years. These characteristics don't generally lead to outstanding dividend performance, and investors may not be happy with the results of owning this stock for its dividend.
With that being said, if you're still considering Cadence Bancorporation as an investment, you'll find it beneficial to know what risks this stock is facing. To help with this, we've discovered 3 warning signs for Cadence Bancorporation that you should be aware of before investing in their shares.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
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. 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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