Associated Banc-Corp (NYSE:ASB) is about to trade ex-dividend in the next four days. If you purchase the stock on or after the 31st of August, you won’t be eligible to receive this dividend, when it is paid on the 15th of September.
Associated Banc-Corp’s next dividend payment will be US$0.18 per share, on the back of last year when the company paid a total of US$0.72 to shareholders. Calculating the last year’s worth of payments shows that Associated Banc-Corp has a trailing yield of 5.1% on the current share price of $14.04. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Associated Banc-Corp has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Associated Banc-Corp
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Associated Banc-Corp paid out a comfortable 33% 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.
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
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. Fortunately for readers, Associated Banc-Corp’s earnings per share have been growing at 13% 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 10 years, Associated Banc-Corp has increased its dividend at approximately 14% a year on average. It’s exciting to see that both earnings and dividends per share have grown rapidly over the past few years.
Is Associated Banc-Corp worth buying for its dividend? Companies like Associated Banc-Corp that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. Associated Banc-Corp 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.
With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. To help with this, we’ve discovered 2 warning signs for Associated Banc-Corp (1 is a bit concerning!) that you ought to be aware of before buying the shares.
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.
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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