Stock Analysis

Westamerica Bancorporation (NASDAQ:WABC) Goes Ex-Dividend Soon

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NasdaqGS:WABC
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It looks like Westamerica Bancorporation (NASDAQ:WABC) is about to go ex-dividend in the next 3 days. If you purchase the stock on or after the 5th of February, you won't be eligible to receive this dividend, when it is paid on the 19th of February.

Westamerica Bancorporation's next dividend payment will be US$0.41 per share. Last year, in total, the company distributed US$1.64 to shareholders. Calculating the last year's worth of payments shows that Westamerica Bancorporation has a trailing yield of 2.9% on the current share price of $55.82. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether Westamerica Bancorporation can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Westamerica Bancorporation

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Westamerica Bancorporation paid out more than half (55%) of its earnings last year, which is a regular payout ratio for most companies.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

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NasdaqGS:WABC Historic Dividend February 1st 2021

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see Westamerica Bancorporation earnings per share are up 5.4% per annum over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Westamerica Bancorporation has delivered an average of 1.3% per year annual increase in its dividend, based on the past 10 years of dividend payments.

The Bottom Line

Should investors buy Westamerica Bancorporation for the upcoming dividend? Westamerica Bancorporation has been generating some growth in earnings per share while paying out more than half of its earnings to shareholders in the form of dividends. We think there are likely better opportunities out there.

With that being said, if dividends aren't your biggest concern with Westamerica Bancorporation, you should know about the other risks facing this business. For example, we've found 1 warning sign for Westamerica Bancorporation that we recommend you consider before investing in the business.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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What are the risks and opportunities for Westamerica Bancorporation?

Westamerica Bancorporation operates as a bank holding company for the Westamerica Bank that provides various banking products and services to individual and commercial customers.

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Rewards

  • Price-To-Earnings ratio (12.5x) is below the US market (15.5x)

  • Earnings are forecast to grow 9.06% per year

  • Earnings grew by 41.1% over the past year

Risks

No risks detected for WABC from our risks checks.

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Westamerica Bancorporation

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