Is It Smart To Buy Zions Bancorporation, National Association (NASDAQ:ZION) Before It Goes Ex-Dividend?

Zions Bancorporation, National Association (NASDAQ:ZION) stock is about to trade ex-dividend in 4 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. In other words, investors can purchase Zions Bancorporation National Association's shares before the 14th of November in order to be eligible for the dividend, which will be paid on the 21st of November.

The company's next dividend payment will be US$0.43 per share, on the back of last year when the company paid a total of US$1.64 to shareholders. Calculating the last year's worth of payments shows that Zions Bancorporation National Association has a trailing yield of 2.8% on the current share price of US$58.13. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! So we need to investigate whether Zions Bancorporation National Association can afford its dividend, and if the dividend could grow.

See our latest analysis for Zions Bancorporation National Association

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Zions Bancorporation National Association paid out a comfortable 37% of its profit last year.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That explains why we're not overly excited about Zions Bancorporation National Association's flat earnings over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, Zions Bancorporation National Association has lifted its dividend by approximately 26% a year on average.

The Bottom Line

Should investors buy Zions Bancorporation National Association for the upcoming dividend? Earnings per share have been flat in recent years, although Zions Bancorporation National Association reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. We think this is a pretty attractive combination, and would be interested in investigating Zions Bancorporation National Association more closely.

Wondering what the future holds for Zions Bancorporation National Association? See what the 17 analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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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.