Back to top

Image: Bigstock

CVB Financial (CVBF) is a Top Dividend Stock Right Now: Should You Buy?

Read MoreHide Full Article

All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

CVB Financial in Focus

CVB Financial (CVBF - Free Report) is headquartered in Ontario, and is in the Finance sector. The stock has seen a price change of 25.03% since the start of the year. The bank holding company is currently shelling out a dividend of $0.19 per share, with a dividend yield of 2.84%. This compares to the Banks - West industry's yield of 2.58% and the S&P 500's yield of 1.61%.

Taking a look at the company's dividend growth, its current annualized dividend of $0.76 is up 5.6% from last year. Over the last 5 years, CVB Financial has increased its dividend 3 times on a year-over-year basis for an average annual increase of 7.45%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. CVB Financial's current payout ratio is 52%, meaning it paid out 52% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, CVBF expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $1.65 per share, representing a year-over-year earnings growth rate of 5.77%.

Bottom Line

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.

Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that CVBF is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


CVB Financial Corporation (CVBF) - free report >>

Published in