JPMorgan Chase & Co.'s (NYSE:JPM) investors are due to receive a payment of $1.15 per share on 31st of July. Although the dividend is now higher, the yield is only 2.3%, which is below the industry average.
See our latest analysis for JPMorgan Chase
JPMorgan Chase's Earnings Will Easily Cover The Distributions
If it is predictable over a long period, even low dividend yields can be attractive.
JPMorgan Chase has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on JPMorgan Chase's last earnings report, the payout ratio is at a decent 26%, meaning that the company is able to pay out its dividend with a bit of room to spare.
The next 3 years are set to see EPS grow by 4.9%. Analysts estimate the future payout ratio will be 30% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
JPMorgan Chase Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was $1.52, compared to the most recent full-year payment of $4.60. This means that it has been growing its distributions at 12% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that JPMorgan Chase has grown earnings per share at 13% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
We Really Like JPMorgan Chase's Dividend
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. 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.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. To that end, JPMorgan Chase has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about. Is JPMorgan Chase not quite the opportunity you were looking for? Why not check out our selection of top 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.
About NYSE:JPM
Flawless balance sheet established dividend payer.
