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It looks like Associated Banc-Corp (NYSE:ASB) is about to go ex-dividend in the next three days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. This means that investors who purchase Associated Banc-Corp's shares on or after the 2nd of December will not receive the dividend, which will be paid on the 16th of December.
The company's next dividend payment will be US$0.23 per share. Last year, in total, the company distributed US$0.88 to shareholders. Based on the last year's worth of payments, Associated Banc-Corp stock has a trailing yield of around 3.4% on the current share price of US$26.72. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! 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.
See our latest analysis for Associated Banc-Corp
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. Associated Banc-Corp is paying out an acceptable 73% of its profit, a common payout level among most companies.
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 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. Associated Banc-Corp's earnings per share have fallen at approximately 10% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Associated Banc-Corp has delivered an average of 9.8% per year annual increase in its dividend, based on the past 10 years of dividend payments. Growing the dividend payout ratio while earnings are declining can deliver nice returns for a while, but it's always worth checking for when the company can't increase the payout ratio any more - because then the music stops.