Washington Trust Bancorp (NASDAQ:WASH) Will Pay A Dividend Of $0.56

The board of Washington Trust Bancorp, Inc. (NASDAQ:WASH) has announced that it will pay a dividend on the 11th of October, with investors receiving $0.56 per share. This makes the dividend yield 6.9%, which will augment investor returns quite nicely.

View our latest analysis for Washington Trust Bancorp

Washington Trust Bancorp's Dividend Forecasted To Be Well Covered By Earnings

If the payments aren't sustainable, a high yield for a few years won't matter that much.

Washington Trust Bancorp has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Washington Trust Bancorp's last earnings report, the payout ratio is at a decent 83%, meaning that the company is able to pay out its dividend with a bit of room to spare.

EPS is set to fall by 5.1% over the next 12 months. Assuming the dividend continues along recent trends, we think the future payout ratio could reach 94%, which is definitely on the higher side.

Washington Trust Bancorp Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the dividend has gone from $1.08 total annually to $2.24. This means that it has been growing its distributions at 7.6% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

Dividend Growth Is Doubtful

The company's investors will be pleased to have been receiving dividend income for some time. However, initial appearances might be deceiving. Over the past five years, it looks as though Washington Trust Bancorp's EPS has declined at around 7.7% a year. A modest decline in earnings isn't great, and it makes it quite unlikely that the dividend will grow in the future unless that trend can be reversed.

Our Thoughts On Washington Trust Bancorp's Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. Although they have been consistent in the past, we think the payments are a little high to be sustained. This company is not in the top tier of income providing stocks.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Washington Trust Bancorp that investors need to be conscious of moving forward. Is Washington Trust 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.