Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see TrustCo Bank Corp NY (NASDAQ:TRST) is about to trade ex-dividend in the next 4 days. If you purchase the stock on or after the 5th of March, you won't be eligible to receive this dividend, when it is paid on the 1st of April.
TrustCo Bank Corp NY's next dividend payment will be US$0.068 per share, and in the last 12 months, the company paid a total of US$0.27 per share. Last year's total dividend payments show that TrustCo Bank Corp NY has a trailing yield of 4.0% on the current share price of $6.87. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether TrustCo Bank Corp NY has been able to grow its dividends, or if the dividend might be cut.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. TrustCo Bank Corp NY paid out a comfortable 46% of its profit last year.
Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see TrustCo Bank Corp NY earnings per share are up 5.1% per annum over the last five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. TrustCo Bank Corp NY has delivered 0.9% dividend growth per year on average over the past ten years.
The Bottom Line
Is TrustCo Bank Corp NY worth buying for its dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Overall, TrustCo Bank Corp NY looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
Keen to explore more data on TrustCo Bank Corp NY's financial performance? Check out our visualisation of its historical revenue and earnings growth.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.