M&T Bank Corp's Dividend Analysis
Delving Into M&T Bank Corp's Dividend Prospects and Stability
M&T Bank Corp (NYSE:MTB) recently announced a dividend of $1.3 per share, payable on 2024-03-29, with the ex-dividend date set for 2024-03-01. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into M&T Bank Corps dividend performance and assess its sustainability.
What Does M&T Bank Corp Do?
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M&T Bank is one of the largest regional banks in the United States, with branches in New York, Pennsylvania, West Virginia, Virginia, Maryland, Delaware, and New Jersey. The bank was founded to serve manufacturing and trading businesses around the Erie Canal and is primarily focused on commercial real estate and commercial-related lending, with some retail operations also present.
A Glimpse at M&T Bank Corp's Dividend History
M&T Bank Corp has maintained a consistent dividend payment record since 1985. Dividends are currently distributed on a quarterly basis.
M&T Bank Corp has increased its dividend each year since 1985. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 39 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down M&T Bank Corp's Dividend Yield and Growth
As of today, M&T Bank Corp currently has a 12-month trailing dividend yield of 3.72% and a 12-month forward dividend yield of 3.72%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, M&T Bank Corp's annual dividend growth rate was 5.70%. Extended to a five-year horizon, this rate increased to 7.10% per year. And over the past decade, M&T Bank Corp's annual dividends per share growth rate stands at 7.40%.
Based on M&T Bank Corp's dividend yield and five-year growth rate, the 5-year yield on cost of M&T Bank Corp stock as of today is approximately 5.24%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, M&T Bank Corp's dividend payout ratio is 0.33.
M&T Bank Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks M&T Bank Corp's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. M&T Bank Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and M&T Bank Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. M&T Bank Corp's revenue has increased by approximately 6.70% per year on average, a rate that underperforms than approximately 51.1% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, M&T Bank Corp's earnings increased by approximately 17.10% per year on average, a rate that underperforms than approximately 36.64% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 4.60%, which underperforms than approximately 63.92% of global competitors.
Next Steps
In conclusion, M&T Bank Corp's consistent dividend payments and growth over the years, combined with a moderate payout ratio and profitability, position it as a potentially attractive option for income-focused investors. While the growth metrics present a mixed picture, the company's established market presence and historical performance could offer reassurance. Investors considering M&T Bank Corp for its dividend prospects should weigh these factors in the context of their individual investment strategies and market conditions. Will M&T Bank Corp continue its dividend aristocrat streak, and how will its growth metrics influence future payouts? These are critical considerations for value investors looking to build a resilient income-generating portfolio.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
