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Trustmark Corporation (NASDAQ:TRMK) will pay a dividend of $0.23 on the 15th of September. This payment means that the dividend yield will be 3.5%, which is around the industry average.
See our latest analysis for Trustmark
Trustmark's Earnings Will Easily Cover The Distributions
Solid dividend yields are great, but they only really help us if the payment is sustainable.
Trustmark has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 54%, which means that Trustmark would be able to pay its last dividend without pressure on the balance sheet.
Over the next year, EPS is forecast to expand by 14.4%. Assuming the dividend continues along recent trends, we think the future payout ratio could be 47% by next year, which is in a pretty sustainable range.
Trustmark Has A Solid Track Record
The company has an extended history of paying stable dividends. The most recent annual payment of $0.92 is about the same as the annual payment 10 years ago. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
The Dividend's Growth Prospects Are Limited
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Let's not jump to conclusions as things might not be as good as they appear on the surface. Although it's important to note that Trustmark's earnings per share has basically not grown from where it was five years ago, which could erode the purchasing power of the dividend over time.
Our Thoughts On Trustmark's Dividend
In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Trustmark that you should be aware of before investing. Is Trustmark not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.