Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that TrustCo Bank Corp NY (NASDAQ:TRST) is about to go ex-dividend in just three days. This means that investors who purchase shares on or after the 3rd of September will not receive the dividend, which will be paid on the 1st of October.
TrustCo Bank Corp NY's next dividend payment will be US$0.068 per share, and in the last 12 months, the company paid a total of US$0.27 per share. Based on the last year's worth of payments, TrustCo Bank Corp NY has a trailing yield of 4.7% on the current stock price of $5.86. If you buy this business for its dividend, you should have an idea of whether TrustCo Bank Corp NY's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see TrustCo Bank Corp NY paying out a modest 50% of its earnings.
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?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at TrustCo Bank Corp NY, with earnings per share up 3.3% on average over the last five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, TrustCo Bank Corp NY has lifted its dividend by approximately 0.9% a year on average.
To Sum It Up
Should investors buy TrustCo Bank Corp NY for the upcoming dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Overall, TrustCo Bank Corp NY looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
Want to learn more about TrustCo Bank Corp NY? Here's a visualisation of its historical rate of revenue and earnings growth.
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.
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