Thurgauer Kantonalbank (VTX:TKBP) Could Be A Buy For Its Upcoming Dividend

Readers hoping to buy Thurgauer Kantonalbank (VTX:TKBP) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Thus, you can purchase Thurgauer Kantonalbank's shares before the 12th of June in order to receive the dividend, which the company will pay on the 14th of June.

The company's next dividend payment will be CHF3.10 per share, and in the last 12 months, the company paid a total of CHF3.10 per share. Calculating the last year's worth of payments shows that Thurgauer Kantonalbank has a trailing yield of 2.5% on the current share price of CHF123. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Thurgauer Kantonalbank can afford its dividend, and if the dividend could grow.

See our latest analysis for Thurgauer Kantonalbank

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Thurgauer Kantonalbank's payout ratio is modest, at just 42% of profit.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see how much of its profit Thurgauer Kantonalbank paid out over the last 12 months.

historic-dividend

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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. With that in mind, we're encouraged by the steady growth at Thurgauer Kantonalbank, with earnings per share up 2.7% on average over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the last eight years, Thurgauer Kantonalbank has lifted its dividend by approximately 1.5% a year on average.

Final Takeaway

Has Thurgauer Kantonalbank got what it takes to maintain its dividend payments? Thurgauer Kantonalbank 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. In summary, Thurgauer Kantonalbank appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

So while Thurgauer Kantonalbank looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. For example, we've found 1 warning sign for Thurgauer Kantonalbank that we recommend you consider before investing in the business.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here