According to Dividend Channel, NBT Bancorp. Inc. (Symbol: NBTB) experienced a dividend yield above 4% on Monday. This is based on its quarterly dividend, which is equivalent to an annualized rate of $1.28. The stock traded as low as $31.96 during the day. Dividends are an important aspect for investors to consider, as they historically contribute a significant portion of the stock market’s overall return. To demonstrate this, let’s consider the example of purchasing shares of the iShares Russell 3000 ETF (IWV) on 5/31/2000 for $78.27 per share. Fast forward to 5/31/2012, and each share was worth $77.79, resulting in a loss of $0.48 or a 0.6% decrease over twelve years. However, during that same period, an investor would have received $10.77 per share in dividends, which would have increased their return to 13.15%. Even with dividends reinvested, the average annual total return would only be around 1.0%. Therefore, a yield above 4% can appear quite attractive if it is sustainable. NBT Bancorp. Inc. (Symbol: NBTB) is a member of the Russell 3000, which grants it special status as one of the largest 3000 companies on the U.S. stock markets.
Typically, dividend amounts are not always predictable and tend to fluctuate alongside a company’s profitability. To assess whether the most recent dividend from NBT Bancorp. Inc. is likely to continue and if a 4% annual yield is reasonable, it can be helpful to review the history chart for NBTB provided below:
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.