Updated 3/6/25
Cadence Bank (NYSE: CADE) is a well-established regional bank serving communities across the Southern U.S. From personal banking to business lending and wealth management, it has built a strong presence in the financial sector. With a market capitalization of around $5.59 billion, it operates in a competitive but stable space.
For investors focused on dividends, Cadence Bank offers an appealing income stream. Its current dividend yield of 3.60% sits above its five-year average, making it a potential choice for those looking to generate steady income. However, there’s a key concern—its payout ratio exceeds 150%, which raises questions about long-term sustainability.
Despite some volatility in its stock price, CADE has demonstrated a commitment to rewarding shareholders. Understanding the details behind its dividend health, financial stability, and valuation will help investors determine if this is a solid long-term income play.
Key Dividend Metrics
📌 Dividend Yield: 3.60%
📌 Forward Annual Dividend Rate: $1.10
📌 Trailing Annual Dividend Rate: $1.00
📌 5-Year Average Dividend Yield: 3.23%
📌 Payout Ratio: 156.35%
📌 Ex-Dividend Date: March 14, 2025
📌 Dividend Date: April 1, 2025
Dividend Overview
Cadence Bank has maintained a consistent dividend payout over the years, which is always a good sign for income-focused investors. A 3.60% yield is respectable, especially in a market where stable income sources are in demand. The stock’s current yield is slightly above its historical five-year average, reinforcing its reputation as a reliable dividend payer.
However, one red flag stands out—the payout ratio. At 156.35%, the bank is paying out significantly more than it earns in profits. A healthy ratio usually stays below 80%, so this number suggests the company is dipping into cash reserves or taking on debt to sustain its dividend. If earnings don’t improve, a cut could be on the horizon.
For those planning to collect the next dividend, the ex-dividend date is coming up on March 14, 2025. Investors need to own shares before this date to qualify for the next payout on April 1, 2025.
Dividend Growth and Safety
Cadence Bank has demonstrated a commitment to paying dividends, but future growth is uncertain. A company’s ability to increase dividends over time largely depends on earnings growth, and right now, CADE is facing challenges.
The biggest concern is the 48.8% drop in quarterly earnings growth. With diluted earnings per share (EPS) at just $0.63, the bank isn’t generating enough profits to comfortably support its current dividend payout.
That said, banks go through economic cycles, and profitability can rebound. Management may be betting on improved earnings in the coming quarters to keep dividends steady. However, if profitability remains under pressure, a dividend cut isn’t out of the question.
For investors focused on long-term dividend growth, it’s important to monitor the company’s financial health closely. While the current yield is attractive, sustainability should be the top priority.
Chart Analysis
Price Action and Trend
Cadence Bank’s stock has been in a steady downtrend over the past few months, with the price now sitting at $30.55. It recently broke below its 200-day moving average (blue line), which had been acting as long-term support. This kind of move often signals a shift in sentiment, as the stock moves from an uptrend to a potential bearish phase.
The 50-day moving average (orange line) is also sloping downward, showing that short-term momentum has weakened. Earlier in the year, the stock reached a high of $40.20, but the inability to hold onto gains has led to a steady decline.
Now that the price is below both key moving averages, it suggests the stock is under selling pressure. Traders often watch these levels closely, and failing to reclaim them soon could lead to further downside.
Volume and Market Participation
Volume has been relatively steady, with some noticeable spikes on large red bars. This indicates periods of strong selling pressure, particularly in late February and early March. When a stock declines on higher-than-average volume, it usually means there’s conviction behind the move.
If buyers were stepping in aggressively, there would likely be a surge in green volume bars. Instead, the selling appears more dominant, which suggests investors may still be offloading shares. For a reversal to take hold, volume would need to pick up alongside a price recovery.
Relative Strength Index (RSI) and Momentum
The RSI indicator is trending lower and now sits near oversold territory. This means the stock has been declining at a faster rate than usual, and it may be due for a short-term bounce. However, just because RSI is low doesn’t necessarily mean a reversal is imminent—it often takes a catalyst for buyers to regain control.
If RSI falls below 30, it would indicate the stock is officially in oversold conditions, which sometimes leads to a temporary bounce. But with the overall trend still bearish, any rebound could be short-lived unless there’s a clear shift in buying pressure.
Moving Average Interaction
One of the more notable aspects of this chart is the death cross formation in progress. This occurs when the 50-day moving average crosses below the 200-day moving average, which is often viewed as a bearish signal. While not always an immediate cause for concern, it does suggest that the broader trend has weakened.
The stock would need to reclaim both moving averages to show signs of strength again. If the 50-day moving average continues to decline, it could create additional resistance for any attempted rebounds.
Support and Resistance Levels
Right now, the stock is hovering around $30.50, which appears to be a key level based on previous price action. If this area fails to hold, the next level of support would likely be near $28, where the stock consolidated in mid-2023.
On the upside, the first major resistance level would be the 200-day moving average, currently around $32.50. If the stock can reclaim that level and hold, it would be an early sign that the selling momentum is slowing down. The 50-day moving average at $34.38 would be the next hurdle to watch.
Analyst Ratings
In recent months, Cadence Bank (CADE) has seen a mix of analyst opinions, reflecting varied perspectives on the company’s performance and future prospects. The consensus among analysts is a “Moderate Buy” rating, with an average 12-month price target of $38.50, suggesting a potential upside from current levels.
Upgrades 📈 Several analysts have expressed increased optimism about Cadence Bank’s prospects. For instance, on December 19, 2024, Barclays upgraded the stock from “Equal Weight” to “Overweight,” raising the price target from $41.00 to $44.00. This upgrade was based on expectations of improved financial performance and a favorable economic environment for regional banks. Similarly, on September 30, 2024, Morgan Stanley shifted its rating from “Equal Weight” to “Overweight,” setting a price target of $39.00. The analyst cited Cadence Bank’s strong capital position and potential for earnings growth as key factors for the upgrade.
Downgrades 📉 Conversely, some analysts have adopted a more cautious stance. On July 24, 2024, Piper Sandler downgraded the stock from “Overweight” to “Neutral,” adjusting the price target to $34.0. The downgrade was attributed to concerns about increasing competition in the regional banking sector and potential margin pressure. Additionally, on October 23, 2024, RBC Capital maintained its “Sector Perform” rating but lowered the price target from $35.00 to $34.00, reflecting a more conservative outlook on the bank’s near-term earnings potential.
Consensus Price Target �
The varied analyst opinions culminate in a consensus price target of $38.50 for Cadence Bank. This target reflects a balanced view of the bank’s strengths, such as its solid capital base and growth opportunities, against challenges like competitive pressures and economic uncertainty. Investors should consider these diverse perspectives when evaluating the stock’s potential.
Earnings Report Summary
Cadence Bank wrapped up the fourth quarter of 2024 with net income available to common shareholders of $130.3 million, or $0.70 per diluted share. That’s pretty close to the previous quarter’s numbers, where they pulled in $134.1 million at $0.72 per share. However, compared to the same period last year, there’s been a noticeable dip—back then, net income stood at $256.7 million, or $1.41 per share.
Looking at the full-year results, the bank reported $514.1 million in net income, or $2.77 per share, which is slightly down from $532.8 million ($2.92 per share) in 2023. But here’s where it gets interesting—when you strip out the one-time expenses and focus on core operations, adjusted net income actually increased. The bank’s adjusted net income from continuing operations hit $507.9 million, or $2.74 per share, marking a 24.5 percent jump on a per-share basis compared to the previous year.
Operationally, things have been moving in the right direction. The bank’s adjusted pre-tax, pre-provision net revenue (PPNR) for 2024 reached $739.0 million, making up 1.54 percent of average assets. That’s a 20.7 percent increase from the previous year, showing that profitability and efficiency are improving.
Cadence also saw steady growth in lending and deposits. Net organic loan growth came in at $1.2 billion, a 3.8 percent increase for the year, while core customer deposits—excluding brokered funds—rose by $2.2 billion, or 6.9 percent growth. The net interest margin improved to 3.30 percent, which suggests the bank has been handling its lending and deposit mix well, even with fluctuating interest rates.
On the shareholder front, the company bought back over 1.2 million shares at an average price of $26.74 per share. This helped drive up the tangible book value per share to $21.54, an 11.5 percent increase year-over-year. The tangible common equity ratio also strengthened, moving from 7.44 percent to 8.67 percent, a positive sign for financial stability.
For the fourth quarter specifically, adjusted PPNR came in at $184.0 million—slightly lower than the previous quarter but $46.1 million higher than the same period in 2023. This shows that while there was a bit of a pullback from the prior quarter, the overall trend is still moving in the right direction.
Financial Health and Stability
Looking beyond the dividend, CADE’s financial position has both strengths and weaknesses. On the positive side, the bank has $1.7 billion in cash on hand, which provides a liquidity cushion. This is reassuring, especially in uncertain economic conditions.
However, total debt stands at $270.79 million. While not alarming, it’s something investors should keep in mind. Profitability metrics paint a picture of a bank that is operating efficiently but not necessarily outperforming its peers.
✔️ Profit Margin: 30.41% – A solid number for a regional bank
✔️ Operating Margin: 41.70% – Shows strong operational efficiency
✔️ Return on Assets (ROA): 1.09% – Decent but not exceptional
✔️ Return on Equity (ROE): 9.75% – Moderate, but not a standout in the sector
One interesting note is CADE’s book value per share, which currently sits at $29.44. With a price-to-book (P/B) ratio of 1.03, the stock is trading close to the value of its underlying assets, suggesting a fair valuation.
Another bright spot is cash flow. Operating cash flow for the trailing twelve months is $856.66 million, a positive sign that the bank continues to generate cash despite earnings headwinds.
Valuation and Stock Performance
When looking at valuation, CADE appears expensive based on trailing earnings, but more reasonable when considering forward estimates. The stock’s trailing price-to-earnings (P/E) ratio is 48.49, making it look overpriced on a past earnings basis. However, the forward P/E drops to 10.86, suggesting analysts expect earnings to improve.
Other valuation metrics provide more context:
✔️ Price-to-Sales (P/S): 4.11 – Higher than some industry peers, but not extreme
✔️ Price-to-Book (P/B): 1.03 – Suggests a fair valuation
The stock has also seen its fair share of volatility. The 52-week range spans from $26.16 to $40.20, reflecting significant price swings. At its current price, CADE is trading below both its 50-day ($34.38) and 200-day ($32.60) moving averages, indicating some recent weakness.
For investors seeking value, this could present an opportunity if earnings recover. However, given the stock’s price action, waiting for stability may be a cautious approach.
Risks and Considerations
1️⃣ Dividend Sustainability – The payout ratio is over 156%, raising concerns about whether the dividend can be maintained.
2️⃣ Earnings Volatility – A steep decline in quarterly earnings could impact future dividend growth.
3️⃣ Interest Rate Sensitivity – As a regional bank, CADE’s profitability is influenced by interest rate changes, which affect its net interest margin.
4️⃣ Stock Price Swings – The stock has experienced sharp fluctuations, which may be a concern for conservative investors.
5️⃣ Economic Uncertainty – If economic conditions deteriorate, regional banks like CADE could face increased loan losses, further impacting earnings.
Final Thoughts
Cadence Bank offers an appealing dividend yield for investors looking to generate income, but sustainability is a growing concern. While the yield of 3.60% is attractive, the payout ratio is uncomfortably high, and earnings growth has been weak.
For those with a long-term horizon, CADE could be a stable dividend payer if earnings rebound. Its current valuation isn’t stretched, and the bank has a track record of rewarding shareholders. However, for more conservative dividend investors, the risks surrounding earnings and payout levels may warrant a closer look before committing capital.
Investors should watch earnings reports closely in the coming quarters to see if the bank’s profitability improves. If it does, CADE could continue to be a steady dividend stock. If not, a dividend cut could be on the table.
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