Yahoo Finance Zions Bancorporation (NASDAQ:ZION): Dividend Is Coming In 2 Days, Should You Buy?
Important news for shareholders and potential investors in Zions Bancorporation (NASDAQ:ZION): The dividend payment of US$0.30 per share will be distributed into shareholder on 23 August 2018, and the stock will begin trading ex-dividend at an earlier date, 15 August 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Zions Bancorporation’s most recent financial data to examine its dividend characteristics in more detail.
View our latest analysis for Zions Bancorporation
5 questions I ask before picking a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is it the top 25% annual dividend yield payer?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has the amount of dividend per share grown over the past?
Can it afford to pay the current rate of dividends from its earnings?
Will it be able to continue to payout at the current rate in the future?
How does Zions Bancorporation fare?
The company currently pays out 20.91% of its earnings as a dividend, according to its trailing twelve-month data, meaning the dividend is sufficiently covered by earnings. Going forward, analysts expect ZION’s payout to increase to 31.22% of its earnings, which leads to a dividend yield of 2.27%. Furthermore, EPS should increase to $4.05. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.
If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Dividend payments from Zions Bancorporation have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends.
Relative to peers, Zions Bancorporation has a yield of 2.26%, which is on the low-side for Banks stocks.
Next Steps:
If Zions Bancorporation is in your portfolio for cash-generating reasons, there may be better alternatives out there. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. There are three pertinent factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for ZION’s future growth? Take a look at our free research report of analyst consensus for ZION’s outlook.
Valuation: What is ZION worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether ZION is currently mispriced by the market.
Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
