CVB Financial Corp. (NASDAQ:CVBF) is about to trade ex-dividend in the next two days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company’s books on the record date. Thus, you can purchase CVB Financial’s shares before the 29th of June in order to receive the dividend, which the company will pay on the 15th of July.
The company’s next dividend payment will be US$0.19 per share, and in the last 12 months, the company paid a total of US$0.72 per share. Based on the last year’s worth of payments, CVB Financial stock has a trailing yield of around 3.1% on the current share price of $24.76. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether CVB Financial can afford its dividend, and if the dividend could grow.
Check out our latest analysis for CVB Financial
If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. CVB Financial paid out 51% of its earnings to investors last year, a normal payout level for most businesses.
Generally speaking, the lower a company’s payout ratios, the more resilient its dividend usually is.
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it’s easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. This is why it’s a relief to see CVB Financial earnings per share are up 7.8% 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. Since the start of our data, 10 years ago, CVB Financial has lifted its dividend by approximately 8.4% 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.
Final Takeaway
Has CVB Financial got what it takes to maintain its dividend payments? Earnings per share have been growing at a reasonable rate, and the company is paying out a bit over half its earnings as dividends. At best we would put it on a watch-list to see if business conditions improve, as it doesn’t look like a clear opportunity right now.
If you’re not too concerned about CVB Financial’s ability to pay dividends, you should still be mindful of some of the other risks that this business faces. In terms of investment risks, we’ve identified 2 warning signs with CVB Financial and understanding them should be part of your investment process.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
