First BanCorp's (NYSE:FBP) Upcoming Dividend Will Be Larger Than Last Year's
First BanCorp.'s (NYSE:FBP) periodic dividend will be increasing on the 8th of March to $0.16, with investors receiving 14% more than last year's $0.14. This makes the dividend yield about the same as the industry average at 3.3%.
See our latest analysis for First BanCorp
First BanCorp's Earnings Will Easily Cover The Distributions
Unless the payments are sustainable, the dividend yield doesn't mean too much.
First BanCorp has a good history of paying out dividends, with its current track record at 5 years. Taking data from its last earnings report, calculating for the company's payout ratio of 33%shows that First BanCorp would be able to pay its last dividend without pressure on the balance sheet.
Over the next 3 years, EPS is forecast to expand by 9.3%. The future payout ratio could be 31% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
First BanCorp Is Still Building Its Track Record
It is great to see that First BanCorp has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. The dividend has gone from an annual total of $0.12 in 2019 to the most recent total annual payment of $0.56. This means that it has been growing its distributions at 36% per annum over that time. First BanCorp has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. It's encouraging to see that First BanCorp has been growing its earnings per share at 14% a year over the past five years. First BanCorp definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like First BanCorp's Dividend
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, First BanCorp has 3 warning signs (and 1 which is a bit concerning) we think you should know about. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
