Yahoo Finance Should Income Investors Look At Zions Bancorporation, National Association (NASDAQ:ZION) Before Its Ex-Dividend?
Zions Bancorporation, National Association (NASDAQ:ZION) is about to trade ex-dividend in the next four days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. This means that investors who purchase Zions Bancorporation National Association's shares on or after the 15th of May will not receive the dividend, which will be paid on the 23rd of May.
The company's next dividend payment will be US$0.41 per share, on the back of last year when the company paid a total of US$1.64 to shareholders. Based on the last year's worth of payments, Zions Bancorporation National Association has a trailing yield of 3.7% on the current stock price of US$44.29. If you buy this business for its dividend, you should have an idea of whether Zions Bancorporation National Association's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
See our latest analysis for Zions Bancorporation National Association
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Zions Bancorporation National Association paid out a comfortable 41% of its profit last year.
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?
Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings fall far enough, the company could be forced to cut its dividend. It's not encouraging to see that Zions Bancorporation National Association's earnings are effectively flat over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Zions Bancorporation National Association has lifted its dividend by approximately 26% a year on average.
Final Takeaway
Is Zions Bancorporation National Association worth buying for its dividend? Zions Bancorporation National Association's earnings per share are basically flat over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. We think there are likely better opportunities out there.
However if you're still interested in Zions Bancorporation National Association as a potential investment, you should definitely consider some of the risks involved with Zions Bancorporation National Association. Case in point: We've spotted 1 warning sign for Zions Bancorporation National Association you should be aware of.
If you're in the market for strong dividend payers, we recommend checking our selection of top 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.
