First Interstate BancSystem, Inc. (NASDAQ:FIBK) is about to trade ex-dividend in the next 4 days. If you purchase the stock on or after the 7th of February, you won't be eligible to receive this dividend, when it is paid on the 20th of February.
First Interstate BancSystem's next dividend payment will be US$0.34 per share, and in the last 12 months, the company paid a total of US$1.36 per share. Last year's total dividend payments show that First Interstate BancSystem has a trailing yield of 3.5% on the current share price of $38.5. If you buy this business for its dividend, you should have an idea of whether First Interstate BancSystem'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.
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. First Interstate BancSystem paid out a comfortable 45% of its profit last year.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're encouraged by the steady growth at First Interstate BancSystem, with earnings per share up 8.5% on average over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past ten years, First Interstate BancSystem has increased its dividend at approximately 12% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
Is First Interstate BancSystem worth buying for its dividend? First Interstate BancSystem has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. We think this is a pretty attractive combination, and would be interested in investigating First Interstate BancSystem more closely.
Curious what other investors think of First Interstate BancSystem? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
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