Yahoo Finance Commerce Bancshares' (NASDAQ:CBSH) Upcoming Dividend Will Be Larger Than Last Year's
Commerce Bancshares, Inc. (NASDAQ:CBSH) will increase its dividend from last year's comparable payment on the 20th of June to $0.27. Despite this raise, the dividend yield of 2.0% is only a modest boost to shareholder returns.
See our latest analysis for Commerce Bancshares
Commerce Bancshares' Dividend Forecasted To Be Well Covered By Earnings
If it is predictable over a long period, even low dividend yields can be attractive.
Commerce Bancshares has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Commerce Bancshares' last earnings report, the payout ratio is at a decent 26%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Over the next year, EPS is forecast to fall by 4.8%. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 31%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
Commerce Bancshares Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The dividend has gone from an annual total of $0.538 in 2013 to the most recent total annual payment of $1.08. This implies that the company grew its distributions at a yearly rate of about 7.2% over that duration. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
Commerce Bancshares Could Grow Its Dividend
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Commerce Bancshares has impressed us by growing EPS at 9.3% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
Commerce Bancshares Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Just as an example, we've come across 2 warning signs for Commerce Bancshares you should be aware of, and 1 of them is concerning. If you are a dividend investor, you might also want to look at our curated 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.
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