3 Checks Before Buying Glacier Bancorp for Its Upcoming Dividend

Investors eyeing Glacier Bancorp, Inc. (NYSE:GBCI) for its upcoming dividend should conduct thorough due diligence before making a move. The financial sector is notoriously volatile, and even the most promising dividend stocks can harbor hidden risks. Here are three critical checks to perform before buying Glacier Bancorp for its upcoming dividend.

1. Dividend Yield and Sustainability

Glacier Bancorp's dividend yield of 3.25% is significantly higher than the sector average of 1.608%. This makes it an attractive option for income-focused investors. However, a high yield is not always a sign of a healthy dividend. Investors should delve deeper into the company's payout ratio and earnings growth to assess the sustainability of this yield.



Glacier Bancorp's payout ratio stands at 79.04%, which means the company is paying out nearly 80% of its earnings as dividends. While this is within a sustainable range, it leaves little room for error. Any significant drop in earnings could jeopardize the dividend. Investors should monitor Glacier Bancorp's earnings reports closely to ensure that the company can maintain its current payout.

2. Earnings Growth and Economic Conditions

Earnings growth is a critical factor in determining the sustainability of a dividend. Glacier Bancorp's earnings per share (EPS) for the past year was $1.68, which supports the current dividend payout. However, future earnings growth will be influenced by broader economic conditions and the company's operational efficiency.



Economic downturns or financial crises can significantly impact the banking sector, potentially reducing Glacier Bancorp's earnings. Investors should consider the macroeconomic environment and the company's ability to navigate economic challenges. Additionally, regulatory changes and interest rate fluctuations can affect Glacier Bancorp's profitability, making it essential to stay informed about industry trends and policy shifts.

3. Dividend Policy and Future Growth

Glacier Bancorp has a history of paying dividends quarterly since 2022, with a consistent dividend amount of $0.33 per share. This consistent payout suggests a commitment to maintaining the current dividend level. However, investors should also consider the company's dividend growth strategy and its potential for future growth.



Glacier Bancorp's dividend growth over the past three years indicates a steady increase in payouts, which is a positive sign for income-focused investors. However, future dividend growth will depend on the company's ability to generate earnings growth and maintain a sustainable payout ratio. Investors should evaluate Glacier Bancorp's growth prospects and its dividend policy to assess the potential for future dividend increases.

Conclusion

Before buying Glacier Bancorp for its upcoming dividend, investors should conduct a thorough analysis of the company's dividend yield, earnings growth, and dividend policy. While Glacier Bancorp's high dividend yield and consistent payouts make it an attractive option, investors should be mindful of the risks associated with a high payout ratio and the potential impact of economic conditions on the company's earnings. By performing these three critical checks, investors can make an informed decision about whether Glacier Bancorp is a suitable addition to their dividend portfolio.