Yahoo Finance S&T Bancorp's (NASDAQ:STBA) Upcoming Dividend Will Be Larger Than Last Year's
S&T Bancorp, Inc. (NASDAQ:STBA) has announced that it will be increasing its dividend from last year's comparable payment on the 25th of May to $0.32. This will take the dividend yield to an attractive 4.6%, providing a nice boost to shareholder returns.
View our latest analysis for S&T Bancorp
S&T Bancorp's Earnings Will Easily Cover The Distributions
A big dividend yield for a few years doesn't mean much if it can't be sustained.
S&T Bancorp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. While past data isn't a guarantee for the future, S&T Bancorp's latest earnings report puts its payout ratio at 25%, showing that the company can pay out its dividends comfortably.
Looking forward, earnings per share is forecast to fall by 8.1% over the next year. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 39%, which would be comfortable for the company to continue in the future.
S&T Bancorp Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The dividend has gone from an annual total of $0.60 in 2013 to the most recent total annual payment of $1.28. This means that it has been growing its distributions at 7.9% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.
S&T Bancorp Could Grow Its Dividend
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. S&T Bancorp has seen EPS rising for the last five years, at 10.0% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.
S&T Bancorp Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for S&T Bancorp that investors should take into consideration. 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.
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