It looks like Truist Financial Corporation (NYSE:TFC) is about to go ex-dividend in the next 2 days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn’t show on the record date. Thus, you can purchase Truist Financial’s shares before the 8th of February in order to receive the dividend, which the company will pay on the 1st of March.
The company’s next dividend payment will be US$0.52 per share. Last year, in total, the company distributed US$2.08 to shareholders. Based on the last year’s worth of payments, Truist Financial stock has a trailing yield of around 5.7% on the current share price of US$36.79. 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 investigate whether Truist Financial can afford its dividend, and if the dividend could grow.
View our latest analysis for Truist Financial
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. Truist Financial paid a dividend last year despite being unprofitable. This might be a one-off event, but it’s not a sustainable state of affairs in the long run.
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
When earnings decline, dividend companies become much harder to analyse and own safely. If earnings fall far enough, the company could be forced to cut its dividend. Truist Financial reported a loss last year, and the general trend suggests its earnings have also been declining in recent years, making us wonder if the dividend is at risk.
Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. Truist Financial has delivered an average of 8.5% per year annual increase in its dividend, based on the past 10 years of dividend payments.
We update our analysis on Truist Financial every 24 hours, so you can always get the latest insights on its financial health, here.
Final Takeaway
From a dividend perspective, should investors buy or avoid Truist Financial? It’s hard to get past the idea of Truist Financial paying a dividend despite reporting a loss over the past year – especially when the general trend in its earnings also looks to be negative. This is not an overtly appealing combination of characteristics, and we’re just not that interested in this company’s dividend.
Having said that, if you’re looking at this stock without much concern for the dividend, you should still be familiar of the risks involved with Truist Financial. To help with this, we’ve discovered 1 warning sign for Truist Financial that you should be aware of before investing in their shares.
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.
Source: finance.yahoo.com
