Washington Trust Bancorp's (NASDAQ:WASH) Dividend Will Be $0.56
The board of Washington Trust Bancorp, Inc. (NASDAQ:WASH) has announced that it will pay a dividend of $0.56 per share on the 12th of April. This means the annual payment is 8.7% of the current stock price, which is above the average for the industry.
Check out our latest analysis for Washington Trust Bancorp
Washington Trust Bancorp's Earnings Will Easily Cover The Distributions
A big dividend yield for a few years doesn't mean much if it can't be sustained.
Washington Trust Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Washington Trust Bancorp's last earnings report, the payout ratio is at a decent 79%, meaning that the company is able to pay out its dividend with a bit of room to spare.
EPS is set to fall by 14.0% over the next 3 years. However, analysts forecast that the future payout ratio could reach 87% over the same time period. This is definitely on the higher side of what we consider sustainable.
Washington Trust Bancorp Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. The annual payment during the last 10 years was $1.00 in 2014, and the most recent fiscal year payment was $2.24. This implies that the company grew its distributions at a yearly rate of about 8.4% over that duration. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
Dividend Growth May Be Hard To Come By
Investors could be attracted to the stock based on the quality of its payment history. However, things aren't all that rosy. It's not great to see that Washington Trust Bancorp's earnings per share has fallen at approximately 6.5% per year over the past five years. If earnings continue declining, the company may have to make the difficult choice of reducing the dividend or even stopping it completely - the opposite of dividend growth.
The Dividend Could Prove To Be Unreliable
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. Although they have been consistent in the past, we think the payments are a little high to be sustained. We would probably look elsewhere for an income investment.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Washington Trust Bancorp that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
