It Might Not Be A Great Idea To Buy TrustCo Bank Corp NY (NASDAQ:TRST) For Its Next Dividend

TrustCo Bank Corp NY (NASDAQ:TRST) is about to trade ex-dividend in the next four days. The ex-dividend date is usually set to be one business day before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important as the process of settlement involves a full business day. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase TrustCo Bank Corp NY's shares on or after the 6th of June, you won't be eligible to receive the dividend, when it is paid on the 1st of July.

The company's next dividend payment will be US$0.36 per share. Last year, in total, the company distributed US$1.44 to shareholders. Last year's total dividend payments show that TrustCo Bank Corp NY has a trailing yield of 4.6% on the current share price of US$31.04. 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 TrustCo Bank Corp NY has been able to grow its dividends, or if the dividend might be cut.

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Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. TrustCo Bank Corp NY is paying out an acceptable 54% of its profit, a common payout level among most companies.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

See our latest analysis for TrustCo Bank Corp NY

Click here to see how much of its profit TrustCo Bank Corp NY paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. That's why it's not ideal to see TrustCo Bank Corp NY's earnings per share have been shrinking at 2.1% a year over the previous five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, TrustCo Bank Corp NY has increased its dividend at approximately 0.9% a year on average.

Final Takeaway

Has TrustCo Bank Corp NY got what it takes to maintain its dividend payments? We're not overly enthused to see TrustCo Bank Corp NY's earnings in retreat at the same time as the company is paying out more than half of its earnings as dividends to shareholders. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.

Although, if you're still interested in TrustCo Bank Corp NY and want to know more, you'll find it very useful to know what risks this stock faces. Our analysis shows 1 warning sign for TrustCo Bank Corp NY and you should be aware of this before buying any shares.

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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.