Associated Banc-Corp (NYSE:ASB) Is Paying Out A Larger Dividend Than Last Year
Associated Banc-Corp (NYSE:ASB) will increase its dividend from last year's comparable payment on the 15th of December to $0.22. This takes the dividend yield to 5.0%, which shareholders will be pleased with.
Check out our latest analysis for Associated Banc-Corp
Associated Banc-Corp's Payment Expected To Have Solid Earnings Coverage
Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.
Associated Banc-Corp 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 Associated Banc-Corp's payout ratio of 34% is a good sign as this means that earnings decently cover dividends.
EPS is set to fall by 6.7% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 42% over the same time period, which is in a pretty comfortable range.
Associated Banc-Corp Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2013, the dividend has gone from $0.32 total annually to $0.88. This implies that the company grew its distributions at a yearly rate of about 11% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
The Dividend Has Growth Potential
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that Associated Banc-Corp has been growing its earnings per share at 7.5% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
We Really Like Associated Banc-Corp's Dividend
Overall, a dividend increase is always good, and we think that Associated Banc-Corp is a strong income stock thanks to its track record and growing earnings. The earnings easily cover the company's distributions, and the company is generating plenty of cash. 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 in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Associated Banc-Corp that investors should take into consideration. Is Associated Banc-Corp not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
