First Busey Corp's Dividend Analysis
Understanding the Dividend Performance, Growth and Sustainability of First Busey Corp
First Busey Corp (NASDAQ:BUSE) recently announced a dividend of $0.24 per share, payable on 2023-10-27, with the ex-dividend date set for 2023-10-19. As investors anticipate this upcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Using data from GuruFocus, this article delves into First Busey Corp's dividend performance and assesses its sustainability.
What Does First Busey Corp Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
First Busey Corporation is a financial holding company, providing retail and commercial banking services, remittance processing, and financial products and services. It operates banking centers in Illinois, Missouri, Florida, and Indiana. The company's operations are divided into three segments: Banking, FirsTech, and Wealth Management, with the banking segment generating the majority of its revenue.
A Glimpse at First Busey Corp's Dividend History
First Busey Corp has upheld a consistent dividend payment record since 1989, currently distributing dividends on a quarterly basis. The company has increased its dividend each year since 2010, earning it the status of a dividend achiever. This title is awarded to companies that have consistently increased their dividend each year for at least the past 13 years.
Breaking Down First Busey Corp's Dividend Yield and Growth
First Busey Corp currently has a 12-month trailing dividend yield of 4.77% and a 12-month forward dividend yield of 4.82%. This indicates an expectation of increased dividend payments over the next 12 months.
Over the past three years, First Busey Corp's annual dividend growth rate was 3.10%. This rate increased to 5.00% per year over a five-year horizon. Over the past decade, First Busey Corp's annual dividends per share growth rate stands at 7.50%.
Considering First Busey Corp's dividend yield and five-year growth rate, the 5-year yield on cost of First Busey Corp stock as of today is approximately 6.09%.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of a dividend can be gauged by evaluating the company's payout ratio. The dividend payout ratio reveals the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, ensuring funds for future growth and unexpected downturns. As of 2023-06-30, First Busey Corp's dividend payout ratio is 0.39.
First Busey Corp's profitability rank is 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported positive net income each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
For dividends to be sustainable, a company must have robust growth metrics. First Busey Corp's growth rank of 6 out of 10 suggests a fair growth outlook. The company's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. However, First Busey Corp's revenue has increased by approximately 3.10% per year on average, a rate that underperforms approximately 69.37% 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, First Busey Corp's earnings increased by approximately 7.00% per year on average, a rate that underperforms approximately 54.41% of global competitors. Furthermore, the company's 5-year EBITDA growth rate of 7.50% underperforms approximately 52.52% of global competitors.
Conclusion
Based on First Busey Corp's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, it appears that the company has a sustainable dividend policy. Despite some underperformance in growth metrics compared to global competitors, First Busey Corp has demonstrated a consistent and increasing dividend payment history, a fair profitability rank, and a reasonable payout ratio. These factors suggest that First Busey Corp's dividends are likely to continue, making it an attractive option for value investors seeking steady dividend income.
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.
