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Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see ConnectOne Bancorp, Inc. (NASDAQ:CNOB) is about to trade ex-dividend in the next 3 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 important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. In other words, investors can purchase ConnectOne Bancorp's shares before the 15th of May in order to be eligible for the dividend, which will be paid on the 2nd of June.
The company's next dividend payment will be US$0.18 per share, on the back of last year when the company paid a total of US$0.72 to shareholders. Based on the last year's worth of payments, ConnectOne Bancorp has a trailing yield of 3.0% on the current stock price of US$24.00. If you buy this business for its dividend, you should have an idea of whether ConnectOne Bancorp's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately ConnectOne Bancorp's payout ratio is modest, at just 39% of profit.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Check out our latest analysis for ConnectOne Bancorp
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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. So we're not too excited that ConnectOne Bancorp's earnings are down 2.4% a year over the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, ConnectOne Bancorp has lifted its dividend by approximately 9.1% a year on average.
To Sum It Up
Has ConnectOne Bancorp got what it takes to maintain its dividend payments? ConnectOne Bancorp's earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. We think there are likely better opportunities out there.