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It looks like Byline Bancorp, Inc. (NYSE:BY) is about to go ex-dividend in the next four days. Investors can purchase shares before the 10th of May in order to be eligible for this dividend, which will be paid on the 25th of May.
Byline Bancorp's next dividend payment will be US$0.06 per share. Last year, in total, the company distributed US$0.24 to shareholders. Looking at the last 12 months of distributions, Byline Bancorp has a trailing yield of approximately 1.0% on its current stock price of $23.09. If you buy this business for its dividend, you should have an idea of whether Byline Bancorp's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
View our latest analysis for Byline Bancorp
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Byline Bancorp paid out just 10% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're discomforted by Byline Bancorp's 24% per annum decline in earnings in the past five years. Such a sharp decline casts doubt on the future sustainability of the dividend.
Given that Byline Bancorp has only been paying a dividend for a year, there's not much of a past history to draw insight from.
To Sum It Up
Should investors buy Byline Bancorp for the upcoming dividend? Byline Bancorp's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. We're unconvinced on the company's merits, and think there might be better opportunities out there.
However if you're still interested in Byline Bancorp as a potential investment, you should definitely consider some of the risks involved with Byline Bancorp. For example, Byline Bancorp has 3 warning signs (and 1 which is a bit concerning) we think you should know about.
A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising 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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