Be Sure To Check Out Park National Corporation (NYSEMKT:PRK) Before It Goes Ex-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 Park National Corporation (NYSEMKT:PRK) is about to go ex-dividend in just four days. Ex-dividend means that investors that purchase the stock on or after the 18th of February will not receive this dividend, which will be paid on the 10th of March.

Park National's next dividend payment will be US$1.23 per share, and in the last 12 months, the company paid a total of US$4.12 per share. Looking at the last 12 months of distributions, Park National has a trailing yield of approximately 3.5% on its current stock price of $117.49. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.

See our latest analysis for Park National

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Park National is paying out an acceptable 52% of its profit, a common payout level among most companies.

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 in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're encouraged by the steady growth at Park National, with earnings per share up 8.3% on average 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. In the last 10 years, Park National has lifted its dividend by approximately 0.9% a year on average.

To Sum It Up

From a dividend perspective, should investors buy or avoid Park National? Park National has been generating some growth in earnings per share while paying out more than half of its earnings to shareholders in the form of dividends. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

However if you're still interested in Park National as a potential investment, you should definitely consider some of the risks involved with Park National. In terms of investment risks, we've identified 1 warning sign with Park National and understanding them should be part of your investment process.

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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