Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Zions Bancorporation, National Association (NASDAQ:ZION) is about to trade ex-dividend in the next three days. The ex-dividend date occurs one day before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important as the process of settlement involves a full business day. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase Zions Bancorporation National Association's shares on or after the 13th of August, you won't be eligible to receive the dividend, when it is paid on the 20th of August.

The company's next dividend payment will be US$0.48 per share, on the back of last year when the company paid a total of US$1.80 to shareholders. Based on the last year's worth of payments, Zions Bancorporation National Association stock has a trailing yield of around 2.7% on the current share price of US$70.32. If you buy this business for its dividend, you should have an idea of whether Zions Bancorporation National Association's dividend is reliable and sustainable. As a result, readers should always check whether Zions Bancorporation National Association has been able to grow its dividends, or if the dividend might be cut.

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. Zions Bancorporation National Association paid out just 23% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.

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 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. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's comforting to see Zions Bancorporation National Association's earnings have been skyrocketing, up 21% per annum for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Zions Bancorporation National Association has increased its dividend at approximately 23% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

To Sum It Up

Has Zions Bancorporation National Association got what it takes to maintain its dividend payments? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. Overall, Zions Bancorporation National Association looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while Zions Bancorporation National Association has an appealing dividend, it's worth knowing the risks involved with this stock. Be aware that Zions Bancorporation National Association is showing 2 warning signs in our investment analysis, and 1 of those is potentially serious...

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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.