Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Bank of Commerce Holdings (NASDAQ:BOCH) is about to go ex-dividend in just four days. You can purchase shares before the 28th of December in order to receive the dividend, which the company will pay on the 8th of January.
Bank of Commerce Holdings's next dividend payment will be US$0.06 per share, and in the last 12 months, the company paid a total of US$0.20 per share. Last year's total dividend payments show that Bank of Commerce Holdings has a trailing yield of 2.4% on the current share price of $9.88. 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. As a result, readers should always check whether Bank of Commerce Holdings has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Bank of Commerce Holdings
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Fortunately Bank of Commerce Holdings's payout ratio is modest, at just 26% of profit.
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?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. 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 are effectively flat on where they were 10 years ago.
Final Takeaway
Is Bank of Commerce Holdings worth buying for its dividend? 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. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. Overall, Bank of Commerce Holdings looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.