Explore ConnectOne Bancorp’s Fair Values from the Community and select yours
It looks like ConnectOne Bancorp, Inc. (NASDAQ:CNOB) is about to go ex-dividend in the next 4 days. The ex-dividend date is one business day before a company’s record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least one business day to settle. Thus, you can purchase ConnectOne Bancorp’s shares before the 15th of August in order to receive the dividend, which the company will pay on the 2nd of September.
The company’s upcoming dividend is US$0.18 a share, following on from the last 12 months, when the company distributed a total of US$0.72 per share to shareholders. Calculating the last year’s worth of payments shows that ConnectOne Bancorp has a trailing yield of 3.2% on the current share price of US$22.83. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether ConnectOne Bancorp can afford its dividend, and if the dividend could grow.
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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. It paid out 88% of its earnings as dividends last year, which is not unreasonable, but limits reinvestment in the business and leaves the dividend vulnerable to a business downturn. It could become a concern if earnings started to decline.
Generally speaking, the lower a company’s payout ratios, the more resilient its dividend usually is.
See our latest analysis for ConnectOne Bancorp
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
When earnings decline, dividend companies become much harder to analyse and own safely. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Readers will understand then, why we’re concerned to see ConnectOne Bancorp’s earnings per share have dropped 21% a year over the past five years. Ultimately, when earnings per share decline, the size of the pie from which dividends can be paid, shrinks.