Bank of N.T. Butterfield & Son (NYSE:NTB) Has Affirmed Its Dividend Of $0.44
The board of The Bank of N.T. Butterfield & Son Limited (NYSE:NTB) has announced that it will pay a dividend on the 28th of November, with investors receiving $0.44 per share. The dividend yield will be 5.6% based on this payment which is still above the industry average.
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
We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.
Bank of N.T. Butterfield & Son has established itself as a dividend paying company, given its 6-year history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio of 45%shows that Bank of N.T. Butterfield & Son would be able to pay its last dividend without pressure on the balance sheet.
Looking forward, EPS is forecast to rise by 32.4% over the next 3 years. Analysts estimate the future payout ratio will be 36% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
Bank of N.T. Butterfield & Son Is Still Building Its Track Record
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. Since 2016, the dividend has gone from $0.40 total annually to $1.76. This implies that the company grew its distributions at a yearly rate of about 28% 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 Looks Likely To Grow
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 Bank of N.T. Butterfield & Son has been growing its earnings per share at 15% a year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.
We Really Like Bank of N.T. Butterfield & Son's Dividend
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for Bank of N.T. Butterfield & Son that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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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