Regular readers know that we love Simply Wall Street Dividends. Trust Financial Corporation (NYSE:TFC) is scheduled to trade ex-dividend within the next three days. The ex-dividend date is one business day before the record date and is the closing date on which a shareholder is on the company's books and eligible for dividend payments. The ex-dividend date is an important date to be aware of, as purchasing stocks after this date may result in delayed settlements that will not show up on the record date. Therefore, he can purchase Truist Financial stock by May 9th and receive the dividend that the company pays him on June 3rd.
The company's next dividend will be US$0.52 per share. Last year, the company distributed a total of $2.08 to shareholders. Based on the last year's worth of payments, Truist Financial has a yield to trail of 5.4% on the current stock price of $38.85. We love to see companies pay dividends, but it's also important to make sure our golden goose doesn't die by laying golden eggs. So we need to investigate whether Truist Financial can afford its dividend, and if the dividend could grow.
Check out our latest analysis for Truist Financial.
Dividends are typically paid out of company profits, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Trust Financial made a loss last year, so its dividends are not fully covered by profits. This is not a sustainable situation, so it's worth considering whether earnings can be expected to recover.
Click here to see the company's payout ratio and analyst estimates of its future dividends.
Are profits and dividends growing?
Companies whose profits are shrinking are difficult to view from a dividend perspective. If profits decline and the company is forced to cut its dividend, investors could see the value of their investments explode. Trust Financial reported a loss last year, and general trends suggest that its profits have also declined in recent years, leading us to think its dividend may be at risk.
Many investors assess a company's dividend performance by evaluating how much its dividend payments have changed over time. Since the beginning of our data 10 years ago, Truist Financial has raised its dividend by an average of about 8.5% per year.
See our latest analysis on Truist Financial's balance sheet strength here.
final point
Is Trust Financial an attractive dividend stock, or is it better left on the shelf? Firstly, it's not great to see the company paying a dividend despite making a loss last year. To make matters worse, the overall trend in earnings seems to be negative in recent years. These characteristics usually do not translate into good dividend performance, and investors may not be happy with the results of owning this stock for its dividend.
So if you're still interested in Trust Financial despite its poor dividend quality, you should be well-informed about some of the risks this stock faces. For example, I found that: 1 warning sign for Truist Financial We recommend that you consider this before investing in your business.
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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
