Columbia Banking System (NASDAQ:COLB) Has Announced A Dividend Of $0.36

Columbia Banking System, Inc. (NASDAQ:COLB) has announced that it will pay a dividend of $0.36 per share on the 16th of June. This means the annual payment is 5.8% of the current stock price, which is above the average for the industry.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Columbia Banking System's Dividend Forecasted To Be Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

Columbia Banking System has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Columbia Banking System's last earnings report, the payout ratio is at a decent 61%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, EPS is forecast to rise by 33.8% over the next 3 years. The future payout ratio could be 46% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

See our latest analysis for Columbia Banking System

Columbia Banking System Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $1.01 in 2015 to the most recent total annual payment of $1.44. This implies that the company grew its distributions at a yearly rate of about 3.6% over that duration. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Columbia Banking System has seen EPS rising for the last five years, at 54% per annum. The company's earnings per share has grown rapidly in recent years, and it has a good balance between reinvesting and paying dividends to shareholders, so we think that Columbia Banking System could prove to be a strong dividend payer.

Columbia Banking System Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Columbia Banking System might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 7 Columbia Banking System analysts we track are forecasting continued growth with our free report on analyst estimates for the company. 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.