Readers hoping to buy Zions Bancorporation, National Association (NASDAQ: ZION) for its dividend will have to come shortly, as the stock is set to trade ex-dividend. The ex-dividend date is one business day before the record date, which is the deadline by which shareholders must be present on the books of the company to be eligible for payment of a dividend. The ex-dividend date is important because each time a stock is bought or sold, the transaction takes at least two business days to settle. As a result, Zions Bancorporation National Association investors who purchase the shares on or after November 9 will not receive the dividend, which will be paid on November 17.
The company’s next dividend payment will be $0.41 per share, and over the past 12 months the company has paid a total of $1.64 per share. Based on last year’s payouts, Zions Bancorporation National Association stock has a yield of about 3.3% on the current stock price of $49.76. If you’re buying this company for its dividend, you should have some idea of the reliability and sustainability of the Zions Bancorporation National Association dividend. We need to see if the dividend is covered by earnings and if it increases.
Dividends are usually paid out of company earnings, so if a company pays out more than it has earned, its dividend is usually at risk of being reduced. That’s why it’s good to see the Zions Bancorporation National Association donating a modest 29% of its revenue.
When a company has paid out less in dividends than it has earned in profits, this generally suggests that its dividend is affordable. The lower the percentage of its profits it pays out, the greater the margin of safety for the dividend if the company goes into a recession.
Have earnings and dividends increased?
Companies with strong growth prospects are generally the best dividend payers because it is easier to increase dividends when earnings per share improve. If business goes into a recession and the dividend is cut, the company could see its value drop precipitously. That’s why it’s heartening to see that Zions Bancorporation National Association’s revenue has skyrocketed, growing 22% annually over the past five years.
Most investors primarily gauge a company’s dividend prospects by checking the historical rate of dividend growth. Zions Bancorporation National Association has seen an average annual increase of 45% in its dividend, based on dividend payouts over the past 10 years. It’s exciting to see that earnings and dividends per share have grown rapidly over the past few years.
To sum up
Is Zions Bancorporation National Association an attractive dividend-paying stock, or better left on the shelf? When companies are growing rapidly and keeping the majority of profits within the company, it is usually a sign that reinvesting profits creates more value than paying dividends to shareholders. This is one of the most attractive investment combinations according to this analysis, as it can create substantial value for long-term investors. In summary, Zions Bancorporation National Association looks promising as a dividend-paying stock, and we suggest you take a closer look.
So while Zions Bancorporation National Association looks good from a dividend perspective, it’s still worth being aware of the risks of this stock. Example: we have identified 1 warning sign for Zions Bancorporation National Association you should be aware.
If you are looking for good dividend payers, we recommend by consulting our selection of the best dividend-paying stocks.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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