NBT Bancorp (NASDAQ:NBTB) Is Increasing Its Dividend To $0.30
NBT Bancorp Inc. (NASDAQ:NBTB) will increase its dividend from last year's comparable payment on the 15th of September to $0.30. This makes the dividend yield about the same as the industry average at 3.0%.
View our latest analysis for NBT Bancorp
NBT Bancorp's Dividend Forecasted To Be Well Covered By Earnings
Solid dividend yields are great, but they only really help us if the payment is sustainable.
NBT Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Past distributions do not necessarily guarantee future ones, but NBT Bancorp's payout ratio of 32% is a good sign as this means that earnings decently cover dividends.
Over the next year, EPS is forecast to fall by 0.6%. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 34%, which would be comfortable for the company to continue in the future.
NBT Bancorp Has A Solid Track Record
The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.80 in 2012, and the most recent fiscal year payment was $1.20. This means that it has been growing its distributions at 4.1% per annum over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. It's encouraging to see that NBT Bancorp has been growing its earnings per share at 14% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
NBT Bancorp Looks Like A Great Dividend Stock
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All of these factors considered, we think this has solid potential as a dividend stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for NBT Bancorp that investors need to be conscious of moving forward. 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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