Some investors rely on dividends for growing their wealth, and if you’re one of those dividend sleuths, you might be intrigued to know that Truist Financial Corporation (NYSE:TFC) is about to go ex-dividend in just four days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company’s books to be eligible for a dividend payment. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. This means that investors who purchase Truist Financial’s shares on or after the 14th of February will not receive the dividend, which will be paid on the 3rd of March.
The company’s next dividend payment will be US$0.52 per share, on the back of last year when the company paid a total of US$2.08 to shareholders. Based on the last year’s worth of payments, Truist Financial has a trailing yield of 4.4% on the current stock price of US$47.68. We love seeing companies pay a dividend, but it’s also important to be sure that laying the golden eggs isn’t going to kill our golden goose! As a result, readers should always check whether Truist Financial has been able to grow its dividends, or if the dividend might be cut.
Check out our latest analysis for Truist Financial
If a company pays out more in dividends than it earned, then the dividend might become unsustainable – hardly an ideal situation. Truist Financial reported a loss after tax last year, which means it’s paying a dividend despite being unprofitable. While this might be a one-off event, this is unlikely to be sustainable in the long term.
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. 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.
The main way most investors will assess a company’s dividend prospects is by checking the historical rate of dividend growth. In the last 10 years, Truist Financial has lifted its dividend by approximately 8.0% a year on average.
We update our analysis on Truist Financial every 24 hours, so you can always get the latest insights on its financial health, here.
The Bottom Line
Is Truist Financial worth buying for its dividend? It’s definitely not great to see that it paid a dividend despite reporting a loss last year. Worse, the general trend in its earnings looks negative in recent times. Truist Financial doesn’t appear to have a lot going for it, and we’re not inclined to take a risk on owning it for the dividend.
So if you’re still interested in Truist Financial despite it’s poor dividend qualities, you should be well informed on some of the risks facing this stock. Our analysis shows 1 warning sign for Truist Financial and you should be aware of this before buying any shares.
A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.
Valuation is complex, but we’re here to simplify it.
Discover if Truist Financial might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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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: simplywall.st
