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Be Sure To Check Out Commerce Bancshares, Inc. (NASDAQ:CBSH) Before It Goes Ex-Dividend

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Simply Wall St
·3 min read
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Commerce Bancshares, Inc. (NASDAQ:CBSH) is about to trade ex-dividend in the next 4 days. Ex-dividend means that investors that purchase the stock on or after the 8th of March will not receive this dividend, which will be paid on the 24th of March.

Commerce Bancshares's next dividend payment will be US$0.26 per share. Last year, in total, the company distributed US$1.03 to shareholders. Based on the last year's worth of payments, Commerce Bancshares has a trailing yield of 1.4% on the current stock price of $74.36. If you buy this business for its dividend, you should have an idea of whether Commerce Bancshares's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for Commerce Bancshares

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Commerce Bancshares paid out a comfortable 35% of its profit last year.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

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

historic-dividend
historic-dividend

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 earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see Commerce Bancshares earnings per share are up 7.7% per annum 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. In the last 10 years, Commerce Bancshares has lifted its dividend by approximately 6.7% 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

Has Commerce Bancshares got what it takes to maintain its dividend payments? Commerce Bancshares 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. Commerce Bancshares ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

On that note, you'll want to research what risks Commerce Bancshares is facing. Our analysis shows 1 warning sign for Commerce Bancshares and you should be aware of it before buying any 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.