CHCO,
City Holding Company, is a bank holding company. The bank does business in West Virginia as
City National Bank of West Virginia.
CHCO meets all criteria for inclusion in the 2015 Dividend Machine model
portfolio.
Small
banks have done well lately although many experts think they have a more
difficult time than the larger banks due to regulation. CHCO provides commercial banking, consumer
banking, mortgage lending, and wealth management through its 82 offices.
Let’s
look at CHCO’s Dividend Machine Fundamentals to see if it is worthy of
consideration. To be a Dividend Machine
we need more EPS than dividends paid out.
CHCO’s last four quarters of earnings came in at $3.37. Dividends paid out during that period were
$1.60. They just raised the dividend
from $.40 to $.42; a five percent increase.
CHCO goes ex dividend on April 13.
Their five year average dividend increase is 4.7%. This dividend growth rate is within our
Dividend Machine criteria of 4%. CHCO’s
debt to equity (D/E) ratio is .04 which is well below our maximum threshold of 1 or less or equal to industry standard.
The
table below presents CHCO’s Dividend Machine fundamentals
Followers
of this blog know that I do not provide investment advice. My purpose of writing about a particular
stock is to determine if that stock meets the criteria I set out at the
beginning of the year to be a Dividend Machine. Stocks that meet these criteria become part
of that year’s model portfolio.
I
do not sell or buy or reinvest in these portfolios. I develop them to be able to track how this
very strict and disciplined strategy performs.
In
your personal investing you may use different or more criteria to decide which
stocks to buy for income. Some will
use sector diversification to determine if a given stock is a good fit. I appreciate that approach. Others will use free cash flow instead of
EPS to determine if, indeed, a stock is a good fit.
My
Dividend Machine strategy is a simple way for ordinary investors to screen for
dividend stocks. At the beginning of each year, I set the Dividend Machine criteria
based on what I think I need for income, for future income increases, and for
safety. It is interesting that the year I profiled 52 stocks (2011) using these four Dividend Machine criteria, the portfolio ended up being well diversified by industry and market cap. Plus, it has done very well over the past 4 years.
Today, I am adding CHCO to the 2015 Dividend Machine portfolio and perhaps you will consider
this regional bank for the income producing portion of your portfolio.
TheMoneyMadam
Disclosure;
No position but may add.
