Cass Information Systems (NASDAQ:CASS) Will Pay A Larger Dividend Than Last Year At $0.32
Cass Information Systems (NASDAQ:CASS) has announced an increase in its dividend to $0.32, yielding 3.2%, above the industry average. The company has a solid track record of stable dividend payments, growing at an annual rate of 7.2% since 2015. Earnings per share are forecasted to rise by 63.3% next year, suggesting a sustainable payout ratio of 39%. However, growth in earnings per share has been modest at 3.9% annually, indicating limited investment opportunities. Overall, the increased dividend is seen as a positive sign for investors.
Cass Information Systems, Inc. (NASDAQ:CASS) has announced that it will be increasing its dividend from last year's comparable payment on the 15th of December to $0.32. This makes the dividend yield 3.2%, which is above the industry average.
We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.
Cass Information Systems' Payment Could Potentially Have Solid Earnings Coverage
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Based on the last payment, Cass Information Systems was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.
Looking forward, earnings per share is forecast to rise by 63.3% over the next year. If the dividend continues on this path, the payout ratio could be 39% by next year, which we think can be pretty sustainable going forward.
Check out our latest analysis for Cass Information Systems
Cass Information Systems Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $0.636 in 2015 to the most recent total annual payment of $1.28. This implies that the company grew its distributions at a yearly rate of about 7.2% over that duration. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.
Cass Information Systems May Find It Hard To Grow The Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings per share has been crawling upwards at 3.9% per year. Growth of 3.9% may indicate that the company has limited investment opportunity so it is returning its earnings to shareholders instead. This could mean the dividend doesn't have the growth potential we look for going into the future.
We Really Like Cass Information Systems' Dividend
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Now, if you want to look closer, it would be worth checking out our free research on Cass Information Systems management tenure, salary, and performance. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
