BankUnited Inc's Dividend Analysis
Understanding the Sustainability and Growth of Dividends
BankUnited Inc (NYSE:BKU) recently announced a dividend of $0.27 per share, payable on 2023-10-31, with the ex-dividend date set for 2023-10-12. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into BankUnited Inc's dividend performance and assess its sustainability.
What Does BankUnited Inc Do?
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BankUnited Inc is a bank holding company with one wholly owned subsidiary, BankUnited. The bank provides a full range of banking services through banking centers located primarily throughout Florida, as well as New York City. BankUnited is a commercially focused regional bank focusing on small and middle-market businesses, but also provides certain commercial lending and deposit products on a national platform. It has historically grown through organic growth. BankUnited was established by a group of investors who acquired the assets and most of the liabilities of its predecessor from the Federal Deposit Insurance Corporation. The group recapitalized BankUnited with an investment of over $900 million. Most of its revenue comprises net interest income derived mostly from loans.
A Glimpse at BankUnited Inc's Dividend History
BankUnited Inc has maintained a consistent dividend payment record since 2011. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down BankUnited Inc's Dividend Yield and Growth
As of today, BankUnited Inc currently has a 12-month trailing dividend yield of 4.65% and a 12-month forward dividend yield of 4.83%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, BankUnited Inc's annual dividend growth rate was 5.30%. Extended to a five-year horizon, this rate decreased to 3.20% per year. And over the past decade, BankUnited Inc's annual dividends per share growth rate stands at 2.50%.
Based on BankUnited Inc's dividend yield and five-year growth rate, the 5-year yield on cost of BankUnited Inc stock as of today is approximately 5.44%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, BankUnited Inc's dividend payout ratio is 0.30.
BankUnited Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks BankUnited Inc's profitability 5 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. BankUnited Inc's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and BankUnited Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. BankUnited Inc's revenue has increased by approximately 10.10% per year on average, a rate that outperforms approximately 68.79% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, BankUnited Inc's earnings increased by approximately 4.20% per year on average, a rate that outperforms approximately 35.71% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -4.10%, outperforms approximately 14.04% of global competitors.
Conclusion
In conclusion, BankUnited Inc's consistent dividend payments, steady growth rate, manageable payout ratio, fair profitability, and growth metrics suggest a sustainable dividend. These factors, combined with the company's strong revenue model and earnings growth, position it as a potential candidate for dividend-focused investors. However, it's crucial for investors to continue monitoring these indicators as market conditions evolve.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
