Umpqua Holdings Corporation (NASDAQ:UMPQ) has pleased shareholders over the past 10 years, paying out an average dividend of 3.0% annually. The stock currently pays out a dividend yield of 3.7%, and has a market cap of US$4.68b. Should it have a place in your portfolio? Let’s take a look at Umpqua Holdings in more detail.
Here’s how I find good dividend stocks
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has it paid dividend every year without dramatically reducing payout in the past?
- Has the amount of dividend per share grown over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it have the ability to keep paying its dividends going forward?
Does Umpqua Holdings pass our checks?
The current trailing twelve-month payout ratio for the stock is 58.2%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting lower payout ratio of 50.4%, leading to a dividend yield of around 4.0%. However, EPS should increase to $1.51, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time.
In terms of its peers, Umpqua Holdings has a yield of 3.7%, which is high for Banks stocks.
Keeping in mind the dividend characteristics above, Umpqua Holdings is definitely worth considering for investors looking to build a dedicated income portfolio. 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 fundamental factors you should further research:
- Future Outlook: What are well-informed industry analysts predicting for UMPQ’s future growth? Take a look at our free research report of analyst consensus for UMPQ’s outlook.
- Valuation: What is UMPQ 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 UMPQ 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 past 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. For errors that warrant correction please contact the editor at email@example.com.