There is a lot to be liked about Community Trust Bancorp Inc (NASDAQ:CTBI) as an income stock, over the past 10 years it has returned an average of 4.00% per year. The company currently pays out a dividend yield of 2.87% to shareholders, making it a relatively attractive dividend stock. Let’s dig deeper into whether Community Trust Bancorp should have a place in your portfolio. See our latest analysis for Community Trust Bancorp
5 questions I ask before picking a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Is it the top 25% annual dividend yield payer?
- Does it consistently pay out dividends without missing a payment or significantly cutting payout?
- Has it increased its dividend per share amount over the past?
- Is it able to pay the current rate of dividends from its earnings?
- Based on future earnings growth, will it be able to continue to payout dividend at the current rate?
How does Community Trust Bancorp fare?
Community Trust Bancorp has a trailing twelve-month payout ratio of 44.51%, which means that the dividend is covered by earnings. Going forward, analysts expect CTBI’s payout to remain around the same level at 41.58% of its earnings, which leads to a dividend yield of around 2.97%. Furthermore, EPS should increase to $3.3. 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. CTBI has increased its DPS from $1.05 to $1.32 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock. Compared to its peers, Community Trust Bancorp has a yield of 2.87%, which is on the low-side for Banks stocks.
Taking into account the dividend metrics, Community Trust Bancorp 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 recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. There are three fundamental aspects you should further examine:
- Future Outlook: What are well-informed industry analysts predicting for CTBI’s future growth? Take a look at our free research report of analyst consensus for CTBI’s outlook.
- Valuation: What is CTBI 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 CTBI 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.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.