Canada markets close in 1 hour 54 minutes
  • S&P/TSX

    -237.53 (-1.16%)
  • S&P 500

    -77.81 (-1.91%)
  • DOW

    -524.29 (-1.52%)

    -0.0066 (-0.89%)

    -2.36 (-2.95%)

    -149.75 (-0.64%)
  • CMC Crypto 200

    -8.05 (-1.96%)

    -30.00 (-1.66%)
  • RUSSELL 2000

    -50.59 (-2.67%)
  • 10-Yr Bond

    +0.0930 (+2.65%)

    -238.90 (-2.08%)

    +1.77 (+9.29%)
  • FTSE

    +11.31 (+0.15%)
  • NIKKEI 225

    +42.50 (+0.15%)

    -0.0037 (-0.53%)

M&T Bank Corporation (NYSE:MTB) Looks Interesting, And It's About To Pay A Dividend

Readers hoping to buy M&T Bank Corporation (NYSE:MTB) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. 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 important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Therefore, if you purchase M&T Bank's shares on or after the 31st of August, you won't be eligible to receive the dividend, when it is paid on the 30th of September.

The company's next dividend payment will be US$1.20 per share, and in the last 12 months, the company paid a total of US$4.80 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 $184.02. If you buy this business for its dividend, you should have an idea of whether M&T Bank's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.

View our latest analysis for M&T Bank

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately M&T Bank's payout ratio is modest, at just 46% of profit.

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 that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're not enthused to see that M&T Bank's earnings per share have remained effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, M&T Bank has increased its dividend at approximately 5.5% a year on average.

To Sum It Up

From a dividend perspective, should investors buy or avoid M&T Bank? M&T Bank has seen its earnings per share stagnate in recent years, although the company reinvests more than half of its profits in the business, which could bode well for its future prospects. In summary, M&T Bank appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

While it's tempting to invest in M&T Bank for the dividends alone, you should always be mindful of the risks involved. In terms of investment risks, we've identified 2 warning signs with M&T Bank and understanding them should be part of your investment process.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at)

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here