Yahoo Finance Canadian Western Bank (TSE:CWB) Is Increasing Its Dividend To CA$0.32
Canadian Western Bank's (TSE:CWB) dividend will be increasing from last year's payment of the same period to CA$0.32 on 23rd of March. Based on this payment, the dividend yield for the company will be 4.8%, which is fairly typical for the industry.
Check out our latest analysis for Canadian Western Bank
Canadian Western Bank's Earnings Will Easily Cover The Distributions
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
Having distributed dividends for at least 10 years, Canadian Western Bank has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 36%, which means that Canadian Western Bank would be able to pay its last dividend without pressure on the balance sheet.
The next year is set to see EPS grow by 7.4%. If the dividend continues along recent trends, we estimate the future payout ratio will be 37%, which is in the range that makes us comfortable with the sustainability of the dividend.
Canadian Western Bank Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was CA$0.64 in 2013, and the most recent fiscal year payment was CA$1.28. This implies that the company grew its distributions at a yearly rate of about 7.2% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
The Dividend Has Growth Potential
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Canadian Western Bank has impressed us by growing EPS at 5.1% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Canadian Western Bank's prospects of growing its dividend payments in the future.
We Really Like Canadian Western Bank's Dividend
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Case in point: We've spotted 2 warning signs for Canadian Western Bank (of which 1 is significant!) you should know about. Is Canadian Western Bank not quite the opportunity you were looking for? Why not check out our selection of top 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.
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