It looks like Trustmark Corporation (NASDAQ:TRMK) is about to go ex-dividend in the next 3 days. You can purchase shares before the 29th of August in order to receive the dividend, which the company will pay on the 15th of September.
Trustmark's next dividend payment will be US$0.23 per share. Last year, in total, the company distributed US$0.92 to shareholders. Last year's total dividend payments show that Trustmark has a trailing yield of 2.8% on the current share price of $32.68. If you buy this business for its dividend, you should have an idea of whether Trustmark'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. Trustmark paid out a comfortable 41% of its profit last year.
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.
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. This is why it's a relief to see Trustmark earnings per share are up 5.1% per annum 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. Trustmark's dividend payments are effectively flat on where they were ten years ago.
Is Trustmark an attractive dividend stock, or better left on the shelf? Trustmark 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. In summary, Trustmark appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
Curious what other investors think of Trustmark? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow .
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.