F.N.B (NYSE:FNB) Is Paying Out A Dividend Of $0.12
F.N.B. Corporation (NYSE:FNB) has announced that it will pay a dividend of $0.12 per share on the 15th of September. This payment means that the dividend yield will be 3.8%, which is around the industry average.
See our latest analysis for F.N.B
F.N.B's Dividend Forecasted To Be Well Covered By Earnings
We aren't too impressed by dividend yields unless they can be sustained over time.
Having distributed dividends for at least 10 years, F.N.B has a long history of paying out a part of its earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 31%, which means that F.N.B would be able to pay its last dividend without pressure on the balance sheet.
Looking forward, earnings per share is forecast to fall by 1.9% over the next year. But if the dividend continues along recent trends, we estimate the future payout ratio could be 31%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business in the future.
F.N.B Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The payments haven't really changed that much since 10 years ago. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.
The Dividend Looks Likely To Grow
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that F.N.B has grown earnings per share at 14% per year over the past five years. F.N.B definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
F.N.B Looks Like A Great Dividend Stock
Overall, we like to see the dividend staying consistent, and we think F.N.B might even raise payments in the future. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All in all, this checks a lot of the boxes we look for when choosing an income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. However, there are other things to consider for investors when analysing stock performance. To that end, F.N.B has 2 warning signs (and 1 which is a bit concerning) we think you should know about. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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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.
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