BancorpSouth Bank (NYSE:BXS) Looks Like A Good Stock, And It’s Going 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 BancorpSouth Bank (NYSE:BXS) is about to go ex-dividend in just 4 days. You will need to purchase shares before the 12th of March to receive the dividend, which will be paid on the 1st of April.

BancorpSouth Bank’s next dividend payment will be US$0.19 per share, and in the last 12 months, the company paid a total of US$0.76 per share. Calculating the last year’s worth of payments shows that BancorpSouth Bank has a trailing yield of 2.3% on the current share price of $32.54. If you buy this business for its dividend, you should have an idea of whether BancorpSouth Bank’s dividend is reliable and sustainable. So we need to investigate whether BancorpSouth Bank can afford its dividend, and if the dividend could grow.

Check out our latest analysis for BancorpSouth Bank

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Fortunately BancorpSouth Bank’s payout ratio is modest, at just 35% of profit.

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?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we’re encouraged by the steady growth at BancorpSouth Bank, with earnings per share up 9.8% 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. BancorpSouth Bank’s dividend payments per share have declined at 1.5% per year on average over the past 10 years, which is uninspiring.

Final Takeaway

Should investors buy BancorpSouth Bank for the upcoming dividend? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Overall, BancorpSouth Bank looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

On that note, you’ll want to research what risks BancorpSouth Bank is facing. In terms of investment risks, we’ve identified 1 warning sign with BancorpSouth Bank and understanding them should be part of your investment process.

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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