Bank of N.T. Butterfield & Son (NYSE:NTB) Is Due To Pay A Dividend Of $0.44
The Bank of N.T. Butterfield & Son Limited's (NYSE:NTB) investors are due to receive a payment of $0.44 per share on 28th of August. This makes the dividend yield 5.7%, which will augment investor returns quite nicely.
View our latest analysis for Bank of N.T. Butterfield & Son
Bank of N.T. Butterfield & Son's Payment Expected To Have Solid Earnings Coverage
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Bank of N.T. Butterfield & Son has established itself as a dividend paying company, given its 7-year history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but Bank of N.T. Butterfield & Son's payout ratio of 36% is a good sign for current shareholders as this means that earnings decently cover dividends.
The next year is set to see EPS grow by 10.9%. If the dividend continues on this path, the future payout ratio could be 37% by next year, which we think can be pretty sustainable going forward.
Bank of N.T. Butterfield & Son Doesn't Have A Long Payment History
It is great to see that Bank of N.T. Butterfield & Son has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The annual payment during the last 7 years was $0.40 in 2016, and the most recent fiscal year payment was $1.76. This implies that the company grew its distributions at a yearly rate of about 24% over that duration. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
The Dividend Has Growth Potential
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Bank of N.T. Butterfield & Son has impressed us by growing EPS at 9.2% per year over the past five years. Bank of N.T. Butterfield & Son definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like Bank of N.T. Butterfield & Son's Dividend
Overall, we like to see the dividend staying consistent, and we think Bank of N.T. Butterfield & Son might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 2 warning signs for Bank of N.T. Butterfield & Son (1 doesn't sit too well with us!) that you should be aware of before investing. Is Bank of N.T. Butterfield & Son 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.
