Why You Might Be Interested In Bank of Commerce Holdings (NASDAQ:BOCH) For Its Upcoming Dividend
Bank of Commerce Holdings (NASDAQ:BOCH) is about to trade ex-dividend in the next 4 days. You can purchase shares before the 28th of September in order to receive the dividend, which the company will pay on the 9th of October.
Bank of Commerce Holdings's next dividend payment will be US$0.05 per share, and in the last 12 months, the company paid a total of US$0.20 per share. Calculating the last year's worth of payments shows that Bank of Commerce Holdings has a trailing yield of 3.0% on the current share price of $6.61. If you buy this business for its dividend, you should have an idea of whether Bank of Commerce Holdings's dividend is reliable and sustainable. So we need to investigate whether Bank of Commerce Holdings can afford its dividend, and if the dividend could grow.
See our latest analysis for Bank of Commerce Holdings
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Bank of Commerce Holdings paid out a comfortable 26% of its profit last year.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Fortunately for readers, Bank of Commerce Holdings's earnings per share have been growing at 14% a year for the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Bank of Commerce Holdings's dividend payments per share have declined at 1.8% per year on average over the past 10 years, which is uninspiring.
The Bottom Line
Has Bank of Commerce Holdings got what it takes to maintain its dividend payments? Companies like Bank of Commerce Holdings that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Bank of Commerce Holdings ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
So while Bank of Commerce Holdings looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. Our analysis shows 2 warning signs for Bank of Commerce Holdings that we strongly recommend you have a look at before investing in the company.
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. 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.
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