U.S. markets closed
  • S&P Futures

    3,845.50
    +36.25 (+0.95%)
     
  • Dow Futures

    31,157.00
    +245.00 (+0.79%)
     
  • Nasdaq Futures

    13,070.50
    +159.50 (+1.24%)
     
  • Russell 2000 Futures

    2,238.00
    +38.80 (+1.76%)
     
  • Crude Oil

    62.71
    +1.21 (+1.97%)
     
  • Gold

    1,742.60
    +13.80 (+0.80%)
     
  • Silver

    26.90
    +0.46 (+1.74%)
     
  • EUR/USD

    1.2092
    +0.0004 (+0.04%)
     
  • 10-Yr Bond

    1.4600
    -0.0580 (-3.82%)
     
  • Vix

    27.95
    -0.94 (-3.25%)
     
  • GBP/USD

    1.3992
    +0.0070 (+0.50%)
     
  • USD/JPY

    106.6030
    +0.1010 (+0.09%)
     
  • BTC-USD

    46,364.78
    -30.44 (-0.07%)
     
  • CMC Crypto 200

    927.18
    -5.95 (-0.64%)
     
  • FTSE 100

    6,483.43
    -168.53 (-2.53%)
     
  • Nikkei 225

    29,590.04
    +624.03 (+2.15%)
     

Is It Smart To Buy Banner Corporation (NASDAQ:BANR) Before It Goes Ex-Dividend?

  • Oops!
    Something went wrong.
    Please try again later.
Simply Wall St
·3 min read
  • Oops!
    Something went wrong.
    Please try again later.

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Banner Corporation (NASDAQ:BANR) is about to trade ex-dividend in the next three days. You can purchase shares before the 3rd of February in order to receive the dividend, which the company will pay on the 16th of February.

Banner's next dividend payment will be US$0.41 per share, and in the last 12 months, the company paid a total of US$1.64 per share. Last year's total dividend payments show that Banner has a trailing yield of 3.7% on the current share price of $44.23. If you buy this business for its dividend, you should have an idea of whether Banner's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for Banner

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Banner's payout ratio is modest, at just 50% of profit.

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.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

historic-dividend
historic-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 fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see Banner's earnings per share have risen 12% per annum over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Banner has lifted its dividend by approximately 19% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

The Bottom Line

Is Banner worth buying for its dividend? Companies like Banner that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. We think this is a pretty attractive combination, and would be interested in investigating Banner more closely.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example - Banner 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.