Cadence Bank (NYSE:CADE) Will Pay A Larger Dividend Than Last Year At $0.235

The board of Cadence Bank (NYSE:CADE) has announced that it will be paying its dividend of $0.235 on the 3rd of April, an increased payment from last year's comparable dividend. This takes the dividend yield to 3.7%, which shareholders will be pleased with.

View our latest analysis for Cadence Bank

Cadence Bank's Earnings Will Easily Cover The Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

Having distributed dividends for at least 10 years, Cadence Bank 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 36%, which means that Cadence Bank would be able to pay its last dividend without pressure on the balance sheet.

The next 3 years are set to see EPS grow by 43.2%. The future payout ratio could be 29% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Cadence Bank Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.04 in 2013, and the most recent fiscal year payment was $0.94. This implies that the company grew its distributions at a yearly rate of about 37% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

We Could See Cadence Bank's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Cadence Bank has grown earnings per share at 8.3% per year over the past five years. Cadence Bank definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Cadence Bank's Dividend

Overall, a dividend increase is always good, and we think that Cadence Bank is a strong income stock thanks to its track record and growing earnings. 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.

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. As an example, we've identified 1 warning sign for Cadence Bank that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield 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.