TrustCo Bank Corp NY (NASDAQ:TRST) Is Increasing Its Dividend To $0.36

TrustCo Bank Corp NY (NASDAQ:TRST) will increase its dividend from last year's comparable payment on the 3rd of April to $0.36. Despite this raise, the dividend yield of 3.9% is only a modest boost to shareholder returns.

See our latest analysis for TrustCo Bank Corp NY

TrustCo Bank Corp NY's Dividend Forecasted To Be Well Covered By Earnings

Even a low dividend yield can be attractive if it is sustained for years on end.

TrustCo Bank Corp NY has a long history of paying out dividends, with its current track record at a minimum of 10 years. Taking data from its last earnings report, calculating for the company's payout ratio shows 36%, which means that TrustCo Bank Corp NY would be able to pay its last dividend without pressure on the balance sheet.

Looking forward, earnings per share is forecast to fall by 23.9% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 44% over the same time period, which is in a pretty comfortable range.

TrustCo Bank Corp NY 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. Since 2013, the dividend has gone from $1.31 total annually to $1.44. Its dividends have grown at less than 1% per annum over this time frame. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

The Dividend Looks Likely To Grow

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. It's encouraging to see that TrustCo Bank Corp NY has been growing its earnings per share at 12% a year over the past five years. TrustCo Bank Corp NY definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

TrustCo Bank Corp NY Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The earnings easily cover the company's distributions, and the company is generating plenty of cash. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we've picked out 1 warning sign for TrustCo Bank Corp NY that investors should take into consideration. Is TrustCo Bank Corp NY not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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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.