Central Pacific Financial (NYSE:CPF) Has Affirmed Its Dividend Of $0.26

The board of Central Pacific Financial Corp. (NYSE:CPF) has announced that it will pay a dividend of $0.26 per share on the 16th of December. This means that the annual payment will be 3.8% of the current stock price, which is in line with the average for the industry.

See our latest analysis for Central Pacific Financial

Central Pacific Financial's 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.

Central Pacific Financial has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Central Pacific Financial's payout ratio of 49% is a good sign as this means that earnings decently cover dividends.

Over the next 3 years, EPS is forecast to expand by 49.8%. The future payout ratio could be 39% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Central Pacific Financial Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the annual payment back then was $0.32, compared to the most recent full-year payment of $1.04. This works out to be a compound annual growth rate (CAGR) of approximately 13% 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.

Dividend Growth May Be Hard To Achieve

The company's investors will be pleased to have been receiving dividend income for some time. However, Central Pacific Financial's EPS was effectively flat over the past five years, which could stop the company from paying more every year. Growth of 0.1% may indicate that the company has limited investment opportunity so it is returning its earnings to shareholders instead. This isn't necessarily bad, but we wouldn't expect rapid dividend growth in the future.

We Really Like Central Pacific Financial's Dividend

Overall, we like to see the dividend staying consistent, and we think Central Pacific Financial might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Are management backing themselves to deliver performance? Check their shareholdings in Central Pacific Financial in our latest insider ownership analysis. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.