Bank of N.T. Butterfield & Son (NYSE:NTB) Has Announced A Dividend Of $0.44

The Bank of N.T. Butterfield & Son Limited's (NYSE:NTB) investors are due to receive a payment of $0.44 per share on 21st of May. This makes the dividend yield 4.5%, which will augment investor returns quite nicely.

We've discovered 1 warning sign about Bank of N.T. Butterfield & Son. View them for free.

Bank of N.T. Butterfield & Son's Earnings Will Easily Cover The Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.

Bank of N.T. Butterfield & Son has a good history of paying out dividends, with its current track record at 9 years. Based on Bank of N.T. Butterfield & Son's last earnings report, the payout ratio is at a decent 36%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next 3 years, EPS is forecast to expand by 15.1%. The future payout ratio could be 32% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

View our latest analysis for Bank of N.T. Butterfield & Son

Bank of N.T. Butterfield & Son Doesn't Have A Long Payment History

Bank of N.T. Butterfield & Son's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. The dividend has gone from an annual total of $0.40 in 2016 to the most recent total annual payment of $1.76. This works out to be a compound annual growth rate (CAGR) of approximately 18% a year over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Bank of N.T. Butterfield & Son has seen EPS rising for the last five years, at 10% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

Bank of N.T. Butterfield & Son Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For instance, we've picked out 1 warning sign for Bank of N.T. Butterfield & Son that investors should take into consideration. Is Bank of N.T. Butterfield & Son 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.