Cullen/Frost Bankers, Inc.'s (NYSE:CFR) dividend will be increasing from last year's payment of the same period to $1.00 on 13th of June. This takes the annual payment to 3.2% of the current stock price, which is about average for the industry.

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Cullen/Frost Bankers' Dividend Forecasted To Be Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

Cullen/Frost Bankers has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Cullen/Frost Bankers' payout ratio of 41% is a good sign as this means that earnings decently cover dividends.

EPS is set to fall by 5.0% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 44% over the same time period, which is in a pretty comfortable range.NYSE:CFR Historic Dividend May 5th 2025

See our latest analysis for Cullen/Frost Bankers

Cullen/Frost Bankers 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. The dividend has gone from an annual total of $2.04 in 2015 to the most recent total annual payment of $4.00. This means that it has been growing its distributions at 7.0% per annum over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

We Could See Cullen/Frost Bankers' Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Cullen/Frost Bankers has grown earnings per share at 9.3% per year over the past five years. The company is paying a reasonable amount of earnings to shareholders, and is growing earnings at a decent rate so we think it could be a decent dividend stock.

We Really Like Cullen/Frost Bankers' Dividend

Overall, a dividend increase is always good, and we think that Cullen/Frost Bankers is a strong income stock thanks to its track record and growing earnings. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All of these factors considered, we think this has solid potential as a dividend stock.

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Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 12 analysts we track are forecasting for Cullen/Frost Bankers for free  with public analyst estimates for the company. Is Cullen/Frost Bankers not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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