It looks like M&T Bank Corporation (NYSE:MTB) is about to go ex-dividend in the next 3 days. You can purchase shares before the 28th of February in order to receive the dividend, which the company will pay on the 31st of March.
M&T Bank's next dividend payment will be US$1.10 per share, and in the last 12 months, the company paid a total of US$4.40 per share. Last year's total dividend payments show that M&T Bank has a trailing yield of 2.6% on the current share price of $168.57. If you buy this business for its dividend, you should have an idea of whether M&T Bank'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.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately M&T Bank's payout ratio is modest, at just 30% of profit.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see M&T Bank's earnings per share have risen 13% 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. Since the start of our data, ten years ago, M&T Bank has lifted its dividend by approximately 4.6% a year on average. Earnings per share have been growing much quicker than dividends, potentially because M&T Bank is keeping back more of its profits to grow the business.
Should investors buy M&T Bank for the upcoming dividend? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. Perhaps even more importantly - this can sometimes signal management is focused on the long term future of the business. We think this is a pretty attractive combination, and would be interested in investigating M&T Bank more closely.
Wondering what the future holds for M&T Bank? See what the 13 analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
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.
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