Cass Information Systems (NASDAQ:CASS) will pay a bigger dividend than last year at $0.29

Cass Information Systems, Inc. (NASDAQ:CASS) the periodic dividend will increase Dec. 15 to $0.29, with investors receiving 3.6% more than last year’s $0.28. This will bring the dividend yield to an attractive 2.7%, giving shareholder returns a nice boost.

See our latest analysis for Cass Information Systems

Cass Information Systems revenue easily covers distributions

Impressive dividend yields are good, but that doesn’t matter much if payouts can’t be sustained. Prior to making this announcement, Cass Information Systems was easily earning enough to cover the dividend. This means that most of what the business earns is used to help it grow.

If the trend of recent years continues, EPS will increase by 6.6% over the next 12 months. Assuming the dividend continues on recent trends, we think the payout ratio could be 47% by next year, which is in a fairly sustainable range.

historical-dividend

Cass Information Systems has a solid track record

The company has a long history of paying stable dividends. The dividend has gone from an annual total of $0.468 in 2012 to the most recent total annual payment of $1.12. This means that it has increased its distributions by 9.1% per year during this period. Companies like this can be very valuable in the long run, if the decent growth rate can be maintained.

We could see the Cass Information Systems dividend increase

Investors who have held shares of the company for the past few years will be pleased with the dividend income they have received. Cass Information Systems has seen EPS increase over the past five years, at 6.6% per year. Cass Information Systems definitely has the potential to increase its dividend in the future with earnings on an uptrend and a low payout ratio.

We really like the Cass Information Systems dividend

Overall, we think it could be an attractive income stock, and it’s only getting better by paying a higher dividend this year. The company is easily earning enough to cover its dividend payments and it’s good to see that income translate into cash flow. Overall, this checks a lot of the boxes we look for when choosing an income stock.

Companies with a stable dividend policy are likely to enjoy greater investor interest than those that suffer from a more inconsistent approach. However, there are other things for investors to consider when analyzing stock performance. You can also find out if shareholders are aligned with insider interests by viewing our visualization of insider holdings and stock trading from Cass Information Systems. If you are a dividend investor, you can also consult our curated list of high yielding dividend stocks.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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