Valley National Bancorp (NASDAQ:VLY) Is Due To Pay A Dividend Of $0.11

Valley National Bancorp (NASDAQ:VLY) will pay a dividend of $0.11 on the 3rd of January. The dividend yield will be 4.4% based on this payment which is still above the industry average.

Check out our latest analysis for Valley National Bancorp

Valley National Bancorp's Payment Expected To Have Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

Valley National 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 Valley National Bancorp's payout ratio of 38% is a good sign as this means that earnings decently cover dividends.

Looking forward, EPS is forecast to rise by 7.6% over the next 3 years. The future payout ratio could be 38% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The annual payment during the last 10 years was $0.65 in 2013, and the most recent fiscal year payment was $0.44. This works out to be a decline of approximately 3.8% per year over that time. Declining dividends isn't generally what we look for as they can indicate that the company is running into some challenges.

The Dividend Looks Likely To Grow

With a relatively unstable dividend, it's even more important to see if earnings per share is growing. Valley National Bancorp has seen EPS rising for the last five years, at 13% per annum. Valley National Bancorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Valley National Bancorp Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. 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 2 warning signs for Valley National Bancorp that investors should take into consideration. Is Valley National Bancorp 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.