Zions Bancorporation National Association (NASDAQ:ZION) Could Be A Buy For Its Upcoming Dividend

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Zions Bancorporation, National Association (NASDAQ:ZION) is about to go ex-dividend in just 4 days. This means that investors who purchase shares on or after the 17th of February will not receive the dividend, which will be paid on the 25th of February.

Zions Bancorporation National Association's next dividend payment will be US$0.34 per share, on the back of last year when the company paid a total of US$1.36 to shareholders. Last year's total dividend payments show that Zions Bancorporation National Association has a trailing yield of 2.8% on the current share price of $48.91. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Zions Bancorporation National Association has been able to grow its dividends, or if the dividend might be cut.

Check out 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. That's why it's good to see Zions Bancorporation National Association paying out a modest 44% of its earnings.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

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

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. It's encouraging to see Zions Bancorporation National Association has grown its earnings rapidly, up 21% a year for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Zions Bancorporation National Association has lifted its dividend by approximately 42% a year on average. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.

To Sum It Up

From a dividend perspective, should investors buy or avoid Zions Bancorporation National Association? Typically, companies that are growing rapidly and paying out a low fraction of earnings are keeping the profits for reinvestment in the business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. Overall, Zions Bancorporation National Association looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

So while Zions Bancorporation National Association looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example - Zions Bancorporation National Association has 2 warning signs we think you should be aware of.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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