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Have you been keeping an eye on S&T Bancorp Inc’s (NASDAQ:STBA) upcoming dividend of $0.25 per share payable on the 17 May 2018? Then you only have 3 days left before the stock starts trading ex-dividend on the 02 May 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I examine S&T Bancorp’s latest financial data to analyse its dividend characteristics. View our latest analysis for S&T Bancorp

5 checks you should use to assess a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

• Is its annual yield among the top 25% of dividend-paying companies?

• Does it consistently pay out dividends without missing a payment of significantly cutting payout?

• Has it increased its dividend per share amount over the past?

• Is its earnings sufficient to payout dividend at the current rate?

• Will the company be able to keep paying dividend based on the future earnings growth?

How does S&T Bancorp fare?

S&T Bancorp has a trailing twelve-month payout ratio of 38.32%, meaning the dividend is sufficiently covered by earnings. Furthermore, analysts have not forecasted a dividends per share for the future, which makes it hard to determine the yield shareholders should expect, and whether the current payout is sustainable, moving forward. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Not only have dividend payouts from S&T Bancorp fallen over the past 10 years, it has also been highly volatile during this time, with drops of over 25% in some years. This means that dividend hunters should probably steer clear of the stock, at least for now until the track record improves. Compared to its peers, S&T Bancorp produces a yield of 2.31%, which is on the low-side for Banks stocks.

Next Steps:

After digging a little deeper into S&T Bancorp’s yield, it’s easy to see why you should be cautious investing in the company just for the dividend. On the other hand, if you are not strictly just a dividend investor, the stock could still be offering some interesting investment opportunities. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three pertinent factors you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for STBA’s future growth? Take a look at our free research report of analyst consensus for STBA’s outlook.

2. Valuation: What is STBA worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether STBA is currently mispriced by the market.

3. Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.