CVB Financial (NASDAQ:CVBF) Has Announced A Dividend Of $0.20

CVB Financial Corp. (NASDAQ:CVBF) has announced that it will pay a dividend of $0.20 per share on the 24th of July. This means the annual payment is 4.1% of the current stock price, which is above the average for the industry.

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CVB Financial's Earnings Will Easily Cover The Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.

CVB Financial has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 55%, which means that CVB Financial would be able to pay its last dividend without pressure on the balance sheet.

Over the next year, EPS is forecast to expand by 3.5%. If the dividend continues along recent trends, we estimate the future payout ratio will be 56%, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for CVB Financial

CVB Financial Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the annual payment back then was $0.40, compared to the most recent full-year payment of $0.80. This works out to be a compound annual growth rate (CAGR) of approximately 7.2% a year over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

CVB Financial May Find It Hard To Grow The Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, CVB Financial's EPS was effectively flat over the past five years, which could stop the company from paying more every year. CVB Financial is struggling to find viable investments, so it is returning more to shareholders. This could mean the dividend doesn't have the growth potential we look for going into the future.

We Really Like CVB Financial's Dividend

Overall, we like to see the dividend staying consistent, and we think CVB Financial might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend 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. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 6 analysts we track are forecasting for CVB Financial for free with public analyst estimates for the company. Is CVB Financial 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.