Is TrustCo Bank Corp NY (NASDAQ:TRST) A Smart Pick For Income Investors?

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Over the past 10 years TrustCo Bank Corp NY (NASDAQ:TRST) has been paying dividends to shareholders. The company is currently worth US$760m, and now yields roughly 3.5%. Does TrustCo Bank Corp NY tick all the boxes of a great dividend stock? Below, I'll take you through my analysis.

See our latest analysis for TrustCo Bank Corp NY

Here's how I find good dividend stocks

If you are a dividend investor, you should always assess these five key metrics:

• Is their annual yield among the top 25% of dividend payers?
• Does it consistently pay out dividends without missing a payment of significantly cutting payout?
• Has the amount of dividend per share grown over the past?
• Is its earnings sufficient to payout dividend at the current rate?
• Based on future earnings growth, will it be able to continue to payout dividend at the current rate?

Does TrustCo Bank Corp NY pass our checks?

The company currently pays out 42% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect TRST's payout to remain around the same level at 42% of its earnings. Assuming a constant share price, this equates to a dividend yield of 3.4%. Moreover, EPS is forecasted to fall to $0.63 in the upcoming year.

When considering the sustainability of dividends, it is also worth checking the cash flow of a company. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.

If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you're eyeing out is reliable in its payments. TRST has increased its DPS from $0.25 to $0.27 in the past 10 years. It has also been paying out dividend consistently during this time, as you'd expect for a company increasing its dividend levels. This is an impressive feat, which makes TRST a true dividend rockstar.

In terms of its peers, TrustCo Bank Corp NY generates a yield of 3.5%, which is high for Mortgage stocks but still below the market's top dividend payers.

Next Steps:

Taking into account the dividend metrics, TrustCo Bank Corp NY ticks most of the boxes as a strong dividend investment, putting it in my list of top dividend payers. Given that this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company's fundamentals and underlying business before making an investment decision. I've put together three important aspects you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for TRST’s future growth? Take a look at our free research report of analyst consensus for TRST’s outlook.
2. Valuation: What is TRST 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 TRST is currently mispriced by the market.
3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at [email protected]. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.