It looks like PacWest Bancorp (NASDAQ:PACW) is about to go ex-dividend in the next 3 days. Investors can purchase shares before the 27th of November in order to be eligible for this dividend, which will be paid on the 10th of December.
PacWest Bancorp's next dividend payment will be US$0.25 per share, on the back of last year when the company paid a total of US$1.00 to shareholders. Calculating the last year's worth of payments shows that PacWest Bancorp has a trailing yield of 4.1% on the current share price of $24.31. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether PacWest Bancorp has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for PacWest Bancorp
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. PacWest Bancorp reported a loss last year, so it's not great to see that it has continued paying a 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 falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. PacWest Bancorp reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, PacWest Bancorp has lifted its dividend by approximately 38% a year on average.
We update our analysis on PacWest Bancorp every 24 hours, so you can always get the latest insights on its financial health, here.
To Sum It Up
Has PacWest Bancorp got what it takes to maintain its dividend payments? It's hard to get past the idea of PacWest Bancorp paying a dividend despite reporting a loss over the past year - especially when the general trend in its earnings also looks to be negative. PacWest Bancorp doesn't appear to have a lot going for it, and we're not inclined to take a risk on owning it for the dividend.
So if you're still interested in PacWest Bancorp despite it's poor dividend qualities, you should be well informed on some of the risks facing this stock. Our analysis shows 2 warning signs for PacWest Bancorp and you should be aware of them before buying any shares.