ConnectOne Bancorp, Inc. (NASDAQ:CNOB) is about to trade ex-dividend in the next 4 days. This means that investors who purchase shares on or after the 10th of October will not receive the dividend, which will be paid on the 1st of November.
ConnectOne Bancorp's upcoming dividend is US$0.09 a share, following on from the last 12 months, when the company distributed a total of US$0.4 per share to shareholders. Looking at the last 12 months of distributions, ConnectOne Bancorp has a trailing yield of approximately 1.6% on its current stock price of $21.92. If you buy this business for its dividend, you should have an idea of whether ConnectOne Bancorp's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are 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. ConnectOne Bancorp has a low and conservative payout ratio of just 16% of its income after tax.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
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 business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see ConnectOne Bancorp's earnings per share have risen 11% 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. It looks like the ConnectOne Bancorp dividends are largely the same as they were ten years ago.
The Bottom Line
Is ConnectOne Bancorp worth buying for its dividend? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. Overall, ConnectOne Bancorp looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
Curious what other investors think of ConnectOne Bancorp? See what analysts are forecasting, with this visualisation of its historical and future estimated earnings and cash flow.
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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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.