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International Bancshares Corporation (NASDAQ:IBOC) stock is about to trade ex-dividend in 4 days. You will need to purchase shares before the 18th of September to receive the dividend, which will be paid on the 5th of October.
International Bancshares's next dividend payment will be US$0.55 per share, and in the last 12 months, the company paid a total of US$1.10 per share. Last year's total dividend payments show that International Bancshares has a trailing yield of 3.7% on the current share price of $29.61. If you buy this business for its dividend, you should have an idea of whether International Bancshares's dividend is reliable and sustainable. As a result, readers should always check whether International Bancshares has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for International Bancshares
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. International Bancshares paid out a comfortable 40% of its profit last year.
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 how much of its profit International Bancshares paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. This is why it's a relief to see International Bancshares earnings per share are up 3.9% 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. International Bancshares has delivered 12% dividend growth per year on average over the past 10 years. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
Final Takeaway
Is International Bancshares an attractive dividend stock, or better left on the shelf? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Overall, International Bancshares looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.