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 F.N.B. Corporation (NYSE:FNB) is about to go ex-dividend in just four days. Investors can purchase shares before the 3rd of September in order to be eligible for this dividend, which will be paid on the 15th of September.
F.N.B's upcoming dividend is US$0.12 a share, following on from the last 12 months, when the company distributed a total of US$0.48 per share to shareholders. Calculating the last year's worth of payments shows that F.N.B has a trailing yield of 6.3% on the current share price of $7.64. If you buy this business for its dividend, you should have an idea of whether F.N.B's dividend is reliable and sustainable. As a result, readers should always check whether F.N.B has been able to grow its dividends, or if the dividend might be cut.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see F.N.B paying out a modest 49% of its earnings.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings fall far enough, the company could be forced to cut its dividend. This is why it's a relief to see F.N.B earnings per share are up 4.1% per annum over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. F.N.B's dividend payments are broadly unchanged compared to where they were 10 years ago.
The Bottom Line
From a dividend perspective, should investors buy or avoid F.N.B? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. F.N.B ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.
On that note, you'll want to research what risks F.N.B is facing. Our analysis shows 1 warning sign for F.N.B and you should be aware of this before buying any shares.
We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. 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.
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