Yahoo Finance Be Sure To Check Out Territorial Bancorp Inc. (NASDAQ:TBNK) Before It Goes Ex-Dividend
Territorial Bancorp Inc. (NASDAQ:TBNK) stock is about to trade ex-dividend in two days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Accordingly, Territorial Bancorp investors that purchase the stock on or after the 11th of May will not receive the dividend, which will be paid on the 26th of May.
The company's next dividend payment will be US$0.23 per share, on the back of last year when the company paid a total of US$1.02 to shareholders. Based on the last year's worth of payments, Territorial Bancorp stock has a trailing yield of around 4.7% on the current share price of $21.74. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.
View our latest analysis for Territorial Bancorp
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Fortunately Territorial Bancorp's payout ratio is modest, at just 49% 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. If earnings fall far enough, the company could be forced to cut its dividend. It's not encouraging to see that Territorial Bancorp's earnings are effectively flat over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Territorial Bancorp has delivered an average of 11% per year annual increase in its dividend, based on the past 10 years of dividend payments.
Final Takeaway
Is Territorial Bancorp an attractive dividend stock, or better left on the shelf? Earnings per share have been flat in recent years, although Territorial Bancorp reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Territorial Bancorp ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
While it's tempting to invest in Territorial Bancorp for the dividends alone, you should always be mindful of the risks involved. To that end, you should learn about the 3 warning signs we've spotted with Territorial Bancorp (including 1 which is a bit concerning).
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
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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.
