JPMorgan Chase (NYSE:JPM) Has Announced That It Will Be Increasing Its Dividend To $1.15

JPMorgan Chase & Co.'s (NYSE:JPM) dividend will be increasing from last year's payment of the same period to $1.15 on 30th of April. Even though the dividend went up, the yield is still quite low at only 2.1%.

View our latest analysis for JPMorgan Chase

JPMorgan Chase's Payment Expected To Have Solid Earnings Coverage

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

JPMorgan Chase has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 25%, which means that JPMorgan Chase 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 7.1%. Analysts forecast the future payout ratio could be 29% over the same time horizon, which is a number we think the company can maintain.

JPMorgan Chase Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the dividend has gone from $1.52 total annually to $4.20. This implies that the company grew its distributions at a yearly rate of about 11% 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.

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 JPMorgan Chase has grown earnings per share at 13% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for JPMorgan Chase's prospects of growing its dividend payments in the future.

We Really Like JPMorgan Chase's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. 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.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've identified 2 warning signs for JPMorgan Chase (1 is significant!) 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.