Stock Analysis

Community Bank System, Inc. (NYSE:CBU) Goes Ex-Dividend Soon

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NYSE:CBU
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Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Community Bank System, Inc. (NYSE:CBU) is about to go ex-dividend in just 4 days. Investors can purchase shares before the 12th of March in order to be eligible for this dividend, which will be paid on the 9th of April.

Community Bank System's upcoming dividend is US$0.42 a share, following on from the last 12 months, when the company distributed a total of US$1.68 per share to shareholders. Last year's total dividend payments show that Community Bank System has a trailing yield of 2.2% on the current share price of $75.27. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Community Bank System has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Community Bank System

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. Community Bank System is paying out an acceptable 54% of its profit, a common payout level among most companies.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

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

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NYSE:CBU Historic Dividend March 7th 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. If earnings fall far enough, the company could be forced to cut its dividend. This is why it's a relief to see Community Bank System earnings per share are up 7.0% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, Community Bank System has lifted its dividend by approximately 5.8% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

Final Takeaway

Is Community Bank System worth buying for its dividend? Community Bank System 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're unconvinced on the company's merits, and think there might be better opportunities out there.

If you want to look further into Community Bank System, it's worth knowing the risks this business faces. To help with this, we've discovered 3 warning signs for Community Bank System (1 doesn't sit too well with us!) that you ought to be aware of before buying the shares.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

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What are the risks and opportunities for Community Bank System?

Community Bank System, Inc. operates as the bank holding company for Community Bank, N.A.

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Rewards

  • Trading at 8.3% below our estimate of its fair value

  • Earnings are forecast to grow 4.85% per year

Risks

No risks detected for CBU from our risks checks.

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