Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see AmeriServ Financial, Inc. (NASDAQ:ASRV) is about to trade ex-dividend in the next three days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Accordingly, AmeriServ Financial investors that purchase the stock on or after the 5th of August will not receive the dividend, which will be paid on the 19th of August.

The company's next dividend payment will be US$0.03 per share. Last year, in total, the company distributed US$0.12 to shareholders. Based on the last year's worth of payments, AmeriServ Financial stock has a trailing yield of around 4.8% on the current share price of US$2.51. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

See our latest analysis for AmeriServ Financial

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. AmeriServ Financial's dividend is not well covered by earnings, as the company lost money last year. This is not a sustainable state of affairs, so it would be worth investigating if earnings are expected to recover.

Click here to see how much of its profit AmeriServ Financial paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. AmeriServ Financial was unprofitable last year and, unfortunately, the general trend suggests its earnings have been in decline over the last five years, making us wonder if the dividend is sustainable at all.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, 10 years ago, AmeriServ Financial has lifted its dividend by approximately 12% a year on average.

Get our latest analysis on AmeriServ Financial's balance sheet health here.

The Bottom Line

Has AmeriServ Financial got what it takes to maintain its dividend payments? It's hard to get past the idea of AmeriServ Financial paying a dividend despite reporting a loss over the past year - especially when the general trend in its earnings also looks to be negative. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.