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On the 17 April 2019, CVB Financial Corp. (NASDAQ:CVBF) will be paying shareholders an upcoming dividend amount of US$0.18 per share. However, investors must have bought the company's stock before 02 April 2019 in order to qualify for the payment. That means you have only 2 days left! What does this mean for current shareholders and potential investors? Below, I will explain how holding CVB Financial can impact your portfolio income stream, by analysing the stock's most recent financial data and dividend attributes.
Here's how I find good dividend stocks
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
- Is it paying an annual yield above 75% of dividend payers?
- Does it consistently pay out dividends without missing a payment of significantly cutting payout?
- Has it increased its dividend per share amount over the past?
- Does earnings amply cover its dividend payments?
- Will it have the ability to keep paying its dividends going forward?
How well does CVB Financial fit our criteria?
The current trailing twelve-month payout ratio for the stock is 45%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 45% which, assuming the share price stays the same, leads to a dividend yield of around 3.2%. Moreover, EPS should increase to $1.47.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. CVBF has increased its DPS from $0.34 to $0.72 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes CVBF a true dividend rockstar.
Relative to peers, CVB Financial produces a yield of 3.4%, which is high for Banks stocks but still below the market's top dividend payers.
Taking into account the dividend metrics, CVB Financial ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I've put together three pertinent factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for CVBF’s future growth? Take a look at our free research report of analyst consensus for CVBF’s outlook.
- Valuation: What is CVBF worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether CVBF is currently mispriced by the market.
- Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
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 firstname.lastname@example.org. 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.