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Community Financial System (NYSE:CBU) Is Increasing Its Dividend To $0.47

Simply Wall St · 07/21 10:30

Community Financial System, Inc. (NYSE:CBU) has announced that it will be increasing its periodic dividend on the 10th of October to $0.47, which will be 2.2% higher than last year's comparable payment amount of $0.46. The payment will take the dividend yield to 3.1%, which is in line with the average for the industry.

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Community Financial System's Dividend Forecasted To Be Well Covered By Earnings

Unless the payments are sustainable, the dividend yield doesn't mean too much.

Community Financial System has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Community Financial System's last earnings report, the payout ratio is at a decent 51%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Looking forward, earnings per share is forecast to rise by 16.3% over the next year. If the dividend continues on this path, the future payout ratio could be 46% by next year, which we think can be pretty sustainable going forward.

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NYSE:CBU Historic Dividend July 21st 2025

Check out our latest analysis for Community Financial System

Community Financial System Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2015, the annual payment back then was $1.20, compared to the most recent full-year payment of $1.84. This works out to be a compound annual growth rate (CAGR) of approximately 4.4% a year over that time. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

The Dividend's Growth Prospects Are Limited

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Earnings has been rising at 2.3% per annum over the last five years, which admittedly is a bit slow. Growth of 2.3% per annum is not particularly high, which might explain why the company is paying out a higher proportion of earnings. This isn't necessarily bad, but we wouldn't expect rapid dividend growth in the future.

Community Financial System Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 5 analysts we track are forecasting for Community Financial System for free with public analyst estimates for the company. Is Community Financial System not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.