Stock Analysis

CVB Financial (NASDAQ:CVBF) Is Increasing Its Dividend To $0.20

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NasdaqGS:CVBF
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The board of CVB Financial Corp. (NASDAQ:CVBF) has announced that it will be paying its dividend of $0.20 on the 20th of October, an increased payment from last year's comparable dividend. This makes the dividend yield about the same as the industry average at 3.0%.

Check out our latest analysis for CVB Financial

CVB Financial's Dividend Forecasted To Be Well Covered By Earnings

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, CVB Financial 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 50%, which means that CVB Financial would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, earnings per share is forecast to rise by 45.2% over the next year. If the dividend continues along recent trends, we estimate the future payout ratio will be 39%, which is in the range that makes us comfortable with the sustainability of the dividend.

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NasdaqGS:CVBF Historic Dividend September 25th 2022

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. The dividend has gone from an annual total of $0.34 in 2012 to the most recent total annual payment of $0.80. This means that it has been growing its distributions at 8.9% per annum over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

The Dividend Has Growth Potential

The company's investors will be pleased to have been receiving dividend income for some time. CVB Financial has impressed us by growing EPS at 7.4% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

We Really Like CVB Financial'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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for CVB Financial that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

What are the risks and opportunities for CVB Financial?

CVB Financial Corp. operates as a bank holding company for Citizens Business Bank, a state-chartered bank that provides banking and financial services to small to mid-sized businesses and individuals.

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Rewards

  • Trading at 34.4% below our estimate of its fair value

  • Earnings are forecast to grow 6.77% per year

  • Earnings grew by 11.3% over the past year

Risks

No risks detected for CVBF from our risks checks.

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