Here's What We Like About International Bancshares' (NASDAQ:IBOC) Upcoming Dividend

International Bancshares Corporation (NASDAQ:IBOC) is about to trade ex-dividend in the next four days. You will need to purchase shares before the 4th of February to receive the dividend, which will be paid on the 17th of February.

International Bancshares's upcoming dividend is US$0.55 a share, following on from the last 12 months, when the company distributed a total of US$1.10 per share to shareholders. Looking at the last 12 months of distributions, International Bancshares has a trailing yield of approximately 2.9% on its current stock price of $37.81. 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! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for International Bancshares

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see International Bancshares paying out a modest 41% of its earnings.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see how much of its profit International Bancshares 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. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're encouraged by the steady growth at International Bancshares, with earnings per share up 3.0% on average over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, International Bancshares has lifted its dividend by approximately 12% 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 International Bancshares for the upcoming dividend? International Bancshares 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. We think this is a pretty attractive combination, and would be interested in investigating International Bancshares more closely.

While it's tempting to invest in International Bancshares for the dividends alone, you should always be mindful of the risks involved. For example - International Bancshares has 1 warning sign 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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