TrustCo Bank Corp NY's (NASDAQ:TRST) Upcoming Dividend Will Be Larger Than Last Year's

TrustCo Bank Corp NY's (NASDAQ:TRST) periodic dividend will be increasing on the 1st of October to $0.38, with investors receiving 5.6% more than last year's $0.36. The payment will take the dividend yield to 3.8%, which is in line with the average for the industry.

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

Solid dividend yields are great, but they only really help us if the payment is sustainable.

TrustCo Bank Corp NY has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 51%, which means that TrustCo Bank Corp NY would be able to pay its last dividend without pressure on the balance sheet.

Over the next year, EPS could expand by 0.6% if recent trends continue. If the dividend continues on this path, the future payout ratio could be 52% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for TrustCo Bank Corp NY

TrustCo Bank Corp NY Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was $1.31 in 2015, and the most recent fiscal year payment was $1.44. Dividend payments have grown at less than 1% a year over this period. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

The Dividend's Growth Prospects Are Limited

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, TrustCo Bank Corp NY's EPS was effectively flat over the past five years, which could stop the company from paying more every year. Growth of 0.6% may indicate that the company has limited investment opportunity so it is returning its earnings to shareholders instead. This could mean the dividend doesn't have the growth potential we look for going into the future.

TrustCo Bank Corp NY Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that TrustCo Bank Corp NY 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. Taking the debate a bit further, we've identified 1 warning sign for TrustCo Bank Corp NY that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated list of high yield 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.