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On Wednesday, Canadian Western Bank (TSX:) (OTC:CBWBF) announced a dividend of $0.33 per share, set to be paid on September 28, 2023, with the ex-dividend date marked for September 13, 2023. This announcement has drawn attention to the bank’s dividend history, yield, and growth rates.
Canadian Western Bank is a diversified financial service organization offering banking, trust, and wealth management services. The company receives maximum revenue from interest income. It has maintained a consistent record of quarterly dividend payments since 2004 and has increased its dividend each year since 2007. This consistency has earned it the status of a dividend achiever, a title given to companies that have increased their dividends each year for at least the past 16 years.
As of today, the bank’s 12-month trailing dividend yield stands at 4.48%, with a forward dividend yield of 4.59%, suggesting an expectation of increased dividend payments over the next 12 months. Over the past three years, Canadian Western Bank’s annual dividend growth rate was 4.10%. This rate increased to 5.50% per year over a five-year horizon and stands at 6.70% over the past decade.
To assess the sustainability of its dividends, the bank’s payout ratio provides crucial insights. As of July 31, 2023, Canadian Western Bank’s dividend payout ratio is 0.39. This relatively low ratio suggests that the bank retains a significant part of its earnings for future growth and unexpected downturns.
The bank’s profitability rank as of July 31, 2023, is six out of ten according to GuruFocus data, suggesting fair profitability. The company has reported positive net income for each year over the past decade.
Canadian Western Bank’s growth rank of six out of ten suggests a fair growth outlook. The bank’s revenue has increased by approximately 6.20% per year on average, outperforming approximately 50.04% of global competitors. Over the past three years, the bank’s earnings have increased by approximately 3.70% per year on average, outperforming around 33.69% of global competitors. The company’s 5-year EBITDA growth rate of 7.40% also outperforms about 47.15% of global competitors.
Given Canadian Western Bank’s consistent dividend payments, impressive dividend growth rate, reasonable payout ratio, and solid profitability, the bank’s dividends appear sustainable. The bank’s growth metrics further indicate that it is well-positioned to continue its dividend payments and potentially increase them in the future. However, investors are advised to conduct their own thorough research before making any investment decisions.
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