- Oops!Something went wrong.Please try again later.
Westamerica Bancorporation (NASDAQ:WABC) stock is about to trade ex-dividend in three days. This means that investors who purchase shares on or after the 5th of February will not receive the dividend, which will be paid on the 19th of February.
Westamerica Bancorporation's next dividend payment will be US$0.41 per share. Last year, in total, the company distributed US$1.64 to shareholders. Based on the last year's worth of payments, Westamerica Bancorporation stock has a trailing yield of around 2.9% on the current share price of $55.82. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Westamerica Bancorporation can afford its dividend, and if the dividend could grow.
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Westamerica Bancorporation paid out more than half (55%) of its earnings last year, which is a regular payout ratio for most companies.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. This is why it's a relief to see Westamerica Bancorporation earnings per share are up 5.4% per annum over the last five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Westamerica Bancorporation has increased its dividend at approximately 1.3% a year on average.
To Sum It Up
Is Westamerica Bancorporation worth buying for its dividend? Westamerica Bancorporation has been generating some growth in earnings per share while paying out more than half of its earnings to shareholders in the form of dividends. It might be worth researching if the company is reinvesting in growth projects that could grow earnings and dividends in the future, but for now we're on the fence about its dividend prospects.
If you want to look further into Westamerica Bancorporation, it's worth knowing the risks this business faces. For example - Westamerica Bancorporation has 1 warning sign we think you should be aware of.
If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
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. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.