Washington Trust Bancorp, Inc. (NASDAQ:WASH) Passed Our Checks, And It's About To Pay A US$0.51 Dividend
It looks like Washington Trust Bancorp, Inc. (NASDAQ:WASH) is about to go ex-dividend in the next 4 days. Investors can purchase shares before the 31st of March in order to be eligible for this dividend, which will be paid on the 9th of April.
Washington Trust Bancorp's next dividend payment will be US$0.51 per share, and in the last 12 months, the company paid a total of US$2.04 per share. Last year's total dividend payments show that Washington Trust Bancorp has a trailing yield of 6.2% on the current share price of $32.93. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Check out our latest analysis for Washington Trust Bancorp
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Washington Trust Bancorp paid out 50% of its earnings to investors last year, a normal payout level for most businesses.
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.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
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. Fortunately for readers, Washington Trust Bancorp's earnings per share have been growing at 10% a year for the past 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, Washington Trust Bancorp has increased its dividend at approximately 9.3% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
To Sum It Up
Has Washington Trust Bancorp got what it takes to maintain its dividend payments? Earnings per share are growing nicely, and Washington Trust Bancorp is paying out a percentage of its earnings that is around the average for dividend-paying stocks. Washington Trust Bancorp ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
In light of that, while Washington Trust Bancorp has an appealing dividend, it's worth knowing the risks involved with this stock. Every company has risks, and we've spotted 2 warning signs for Washington Trust Bancorp (of which 1 makes us a bit uncomfortable!) you should know about.
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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.
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