JPMorgan Chase & Co. (NYSE:JPM) Looks Interesting, And It's About To Pay A Dividend

Readers hoping to buy JPMorgan Chase & Co. (NYSE:JPM) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. This means that investors who purchase shares on or after the 5th of January will not receive the dividend, which will be paid on the 31st of January.

JPMorgan Chase's upcoming dividend is US$0.90 a share, following on from the last 12 months, when the company distributed a total of US$3.60 per share to shareholders. Last year's total dividend payments show that JPMorgan Chase has a trailing yield of 2.9% on the current share price of $125.36. If you buy this business for its dividend, you should have an idea of whether JPMorgan Chase's dividend is reliable and sustainable. As a result, readers should always check whether JPMorgan Chase has been able to grow its dividends, or if the dividend might be cut.

View our latest analysis for JPMorgan Chase

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. JPMorgan Chase paid out a comfortable 47% of its profit last year.

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 decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see JPMorgan Chase earnings per share are up 7.6% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, JPMorgan Chase has lifted its dividend by approximately 34% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.

The Bottom Line

Is JPMorgan Chase an attractive dividend stock, or better left on the shelf? JPMorgan Chase has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. JPMorgan Chase ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. To help with this, we've discovered 1 warning sign for JPMorgan Chase that you should be aware of before investing in their shares.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting 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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