Here's What We Like About ConnectOne Bancorp's (NASDAQ:CNOB) Upcoming Dividend

ConnectOne Bancorp, Inc. (NASDAQ:CNOB) stock is about to trade ex-dividend in four days. If you purchase the stock on or after the 11th of February, you won't be eligible to receive this dividend, when it is paid on the 1st of March.

ConnectOne Bancorp's next dividend payment will be US$0.09 per share. Last year, in total, the company distributed US$0.36 to shareholders. Calculating the last year's worth of payments shows that ConnectOne Bancorp has a trailing yield of 1.6% on the current share price of $23.21. 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! We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for ConnectOne Bancorp

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. ConnectOne Bancorp is paying out just 20% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events.

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.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. This is why it's a relief to see ConnectOne Bancorp earnings per share are up 5.6% per annum 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. ConnectOne Bancorp has delivered 12% dividend growth per year on average over the past 10 years. 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.

Final Takeaway

Is ConnectOne Bancorp worth buying for its dividend? ConnectOne Bancorp 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, ConnectOne Bancorp appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

While it's tempting to invest in ConnectOne Bancorp for the dividends alone, you should always be mindful of the risks involved. For example - ConnectOne Bancorp has 3 warning signs we think you should be aware of.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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