NBT Bancorp (NASDAQ:NBTB) Will Pay A Larger Dividend Than Last Year At $0.32

NBT Bancorp Inc. (NASDAQ:NBTB) will increase its dividend on the 15th of September to $0.32, which is 6.7% higher than last year's payment from the same period of $0.30. Based on this payment, the dividend yield for the company will be 3.4%, which is fairly typical for the industry.

View our latest analysis for NBT Bancorp

NBT Bancorp's Dividend Forecasted To Be Well Covered By Earnings

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.

NBT Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but NBT Bancorp's payout ratio of 37% is a good sign as this means that earnings decently cover dividends.

Looking forward, earnings per share is forecast to rise by 1.7% over the next year. Assuming the dividend continues along recent trends, we think the future payout ratio could be 42% by next year, which is in a pretty sustainable range.

NBT Bancorp Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The dividend has gone from an annual total of $0.80 in 2013 to the most recent total annual payment of $1.20. This implies that the company grew its distributions at a yearly rate of about 4.1% over that duration. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

We Could See NBT Bancorp's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. NBT Bancorp has seen EPS rising for the last five years, at 6.3% per annum. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

NBT Bancorp Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that NBT Bancorp is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for NBT Bancorp that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of 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.