Here's What We Like About Thurgauer Kantonalbank's (VTX:TKBP) Upcoming Dividend

Readers hoping to buy Thurgauer Kantonalbank (VTX:TKBP) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is two business days before a company's record date in most cases, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Meaning, you will need to purchase Thurgauer Kantonalbank's shares before the 26th of May to receive the dividend, which will be paid on the 28th of May.

The company's upcoming dividend is CHF03.40 a share, following on from the last 12 months, when the company distributed a total of CHF3.40 per share to shareholders. Based on the last year's worth of payments, Thurgauer Kantonalbank has a trailing yield of 2.2% on the current stock price of CHF0152.00. 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! So we need to check whether the dividend payments are covered, and if earnings are growing.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. That's why it's good to see Thurgauer Kantonalbank paying out a modest 43% of its earnings.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

View our latest analysis for Thurgauer Kantonalbank

Click here to see how much of its profit Thurgauer Kantonalbank paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're encouraged by the steady growth at Thurgauer Kantonalbank, with earnings per share up 3.2% on average over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, Thurgauer Kantonalbank has lifted its dividend by approximately 2.1% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

To Sum It Up

Should investors buy Thurgauer Kantonalbank for the upcoming dividend? Thurgauer Kantonalbank has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. In summary, Thurgauer Kantonalbank appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

Curious about whether Thurgauer Kantonalbank has been able to consistently generate growth? Here's a chart of its historical revenue and earnings growth.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.