Trustmark (NASDAQ:TRMK) Has Re-Affirmed Its Dividend Of US$0.23

By
Simply Wall St
Published
August 30, 2021
NasdaqGS:TRMK
Source: Shutterstock

Trustmark Corporation (NASDAQ:TRMK) has announced that it will pay a dividend of US$0.23 per share on the 15th of September. The dividend yield will be 2.9% based on this payment which is still above the industry average.

Check out our latest analysis for Trustmark

Trustmark's Dividend Is Well Covered By Earnings

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Before making this announcement, Trustmark was easily earning enough to cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to fall by 29.7%. If the dividend continues along the path it has been on recently, we estimate the payout ratio could be 40%, which is comfortable for the company to continue in the future.

historic-dividend
NasdaqGS:TRMK Historic Dividend August 30th 2021

Trustmark Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. The payments haven't really changed that much since 10 years ago. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Trustmark has seen EPS rising for the last five years, at 16% per annum. Trustmark definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Trustmark Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, Trustmark has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.

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