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TrustCo Bank Corp NY (NASDAQ:TRST) will pay a dividend of $0.36 on the 2nd of January. This means the dividend yield will be fairly typical at 3.8%.
Check out our latest analysis for TrustCo Bank Corp NY
TrustCo Bank Corp NY's Dividend Forecasted To Be Well Covered By Earnings
Unless the payments are sustainable, the dividend yield doesn't mean too much.
TrustCo Bank Corp NY has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 58%, which means that TrustCo Bank Corp NY would be able to pay its last dividend without pressure on the balance sheet.
Unless the company can turn things around, EPS could fall by 4.2% over the next year. If the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 61%, which is definitely feasible to continue.
TrustCo Bank Corp NY Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2014, the annual payment back then was $1.31, compared to the most recent full-year payment of $1.44. Dividend payments have grown at less than 1% a year over this period. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.
TrustCo Bank Corp NY May Find It Hard To Grow The Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, initial appearances might be deceiving. It's not great to see that TrustCo Bank Corp NY's earnings per share has fallen at approximately 4.2% per year over the past five years. Declining earnings will inevitably lead to the company paying a lower dividend in line with lower profits.
Our Thoughts On TrustCo Bank Corp NY's Dividend
Overall, a consistent dividend is a good thing, and we think that TrustCo Bank Corp NY has the ability to continue this into the future. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. See if management have their own wealth at stake, by checking insider shareholdings in TrustCo Bank Corp NY stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.