What To Know Before Buying Associated Banc-Corp (NYSE:ASB) For Its Dividend
Dividends play a key role in compounding returns over time and can form a large part of our portfolio return. Over the past 10 years, Associated Banc-Corp (NYSE:ASB) has returned an average of 2.00% per year to shareholders in terms of dividend yield. Should it have a place in your portfolio? Let’s take a look at Associated Banc-Corp in more detail. Check out our latest analysis for Associated Banc-Corp
5 checks you should use to assess a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is their annual yield among the top 25% of dividend payers?
Does it consistently pay out dividends without missing a payment of significantly cutting payout?
Has the amount of dividend per share grown over the past?
Is its earnings sufficient to payout dividend at the current rate?
Will it have the ability to keep paying its dividends going forward?
How does Associated Banc-Corp fare?
The current trailing twelve-month payout ratio for the stock is 34.52%, which means that the dividend is covered by earnings. Going forward, analysts expect ASB’s payout to remain around the same level at 33.17% of its earnings, which leads to a dividend yield of around 2.47%. Furthermore, EPS should increase to $1.67. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Not only have dividend payouts from Associated Banc-Corp fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. These characteristics do not bode well for income investors seeking reliable stream of dividends. In terms of its peers, Associated Banc-Corp generates a yield of 2.41%, which is on the low-side for Banks stocks.
Next Steps:
Taking all the above into account, Associated Banc-Corp is a complicated pick for dividend investors given that there are a couple of positive things about it as well as negative. But if you are not exclusively a dividend investor, the stock could still be an interesting investment opportunity. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three relevant factors you should look at:
Future Outlook: What are well-informed industry analysts predicting for ASB’s future growth? Take a look at our free research report of analyst consensus for ASB’s outlook.
Valuation: What is ASB worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether ASB is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
