Associated Banc-Corp (NYSE:ASB) Has Announced That It Will Be Increasing Its Dividend To $0.21

The board of Associated Banc-Corp (NYSE:ASB) has announced that it will be paying its dividend of $0.21 on the 15th of September, an increased payment from last year's comparable dividend. This takes the dividend yield to 4.4%, which shareholders will be pleased with.

Check out our latest analysis for Associated Banc-Corp

Associated Banc-Corp's Dividend Forecasted To Be Well Covered By Earnings

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.

Associated Banc-Corp has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 16% also shows that Associated Banc-Corp is able to comfortably pay dividends.

Looking forward, earnings per share is forecast to fall by 20.7% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 44% over the same time period, which is in a pretty comfortable range.

Associated Banc-Corp 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 $0.20 in 2013, and the most recent fiscal year payment was $0.84. This works out to be a compound annual growth rate (CAGR) of approximately 15% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Has Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Associated Banc-Corp has seen EPS rising for the last five years, at 9.2% per annum. Associated Banc-Corp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Associated Banc-Corp Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. For instance, we've picked out 1 warning sign for Associated Banc-Corp that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of 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.