Stock Analysis

International Bancshares (NASDAQ:IBOC) Will Pay A Dividend Of $0.60

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NasdaqGS:IBOC
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The board of International Bancshares Corporation (NASDAQ:IBOC) has announced that it will pay a dividend of $0.60 per share on the 29th of August. Based on this payment, the dividend yield will be 2.7%, which is fairly typical for the industry.

Check out our latest analysis for International Bancshares

International Bancshares' Dividend Forecasted To Be Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Having distributed dividends for at least 10 years, International Bancshares 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 34%, which means that International Bancshares would be able to pay its last dividend without pressure on the balance sheet.

If the trend of the last few years continues, EPS will grow by 10.1% over the next 12 months. Assuming the dividend continues along recent trends, we think the future payout ratio could be 35% by next year, which is in a pretty sustainable range.

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NasdaqGS:IBOC Historic Dividend August 9th 2022

International Bancshares 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 2012, the annual payment back then was $0.38, compared to the most recent full-year payment of $1.20. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

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. We are encouraged to see that International Bancshares has grown earnings per share at 10% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

International Bancshares Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Now, if you want to look closer, it would be worth checking out our free research on International Bancshares management tenure, salary, and performance. Is International Bancshares not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

What are the risks and opportunities for International Bancshares?

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services.

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Rewards

  • Trading at 18.6% below our estimate of its fair value

  • Earnings have grown 6.8% per year over the past 5 years

Risks

No risks detected for IBOC from our risks checks.

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About NasdaqGS:IBOC

International Bancshares

International Bancshares Corporation, a financial holding company, provides commercial and retail banking services.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation2
Future Growth0
Past Performance3
Financial Health6
Dividends4

Read more about these checks in the individual report sections or in our analysis model.

Flawless balance sheet average dividend payer.