Community West Bancshares (NASDAQ:CWBC) Will Pay A Dividend Of $0.075

Community West Bancshares (NASDAQ:CWBC) will pay a dividend of $0.075 on the 31st of August. Including this payment, the dividend yield on the stock will be 2.2%, which is a modest boost for shareholders' returns.

View our latest analysis for Community West Bancshares

Community West Bancshares' Payment Expected To Have Solid Earnings Coverage

The dividend yield is a little bit low, but sustainability of the payments is also an important part of evaluating an income stock.

Community West Bancshares has a good history of paying out dividends, with its current track record at 8 years. Using data from its latest earnings report, Community West Bancshares' payout ratio sits at 19%, an extremely comfortable number that shows that it can pay its dividend.

The next year is set to see EPS grow by 4.1%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 21% by next year, which is in a pretty sustainable range.

Community West Bancshares Is Still Building Its Track Record

The dividend's track record has been pretty solid, but with only 8 years of history we want to see a few more years of history before making any solid conclusions. Since 2014, the dividend has gone from $0.08 total annually to $0.30. This implies that the company grew its distributions at a yearly rate of about 18% over that duration. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Community West Bancshares has impressed us by growing EPS at 16% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Community West Bancshares' prospects of growing its dividend payments in the future.

We Really Like Community West Bancshares' Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. 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. For example, we've picked out 2 warning signs for Community West Bancshares that investors should know about before committing capital to this stock. Is Community West Bancshares 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.