First Interstate BancSystem (NASDAQ:FIBK) Is Paying Out A Dividend Of $0.47
The board of First Interstate BancSystem, Inc. (NASDAQ:FIBK) has announced that it will pay a dividend on the 16th of November, with investors receiving $0.47 per share. This makes the dividend yield 8.2%, which will augment investor returns quite nicely.
See our latest analysis for First Interstate BancSystem
First Interstate BancSystem's Earnings Will Easily Cover The Distributions
A big dividend yield for a few years doesn't mean much if it can't be sustained.
First Interstate BancSystem has a long history of paying out dividends, with its current track record at a minimum of 10 years. While past data isn't a guarantee for the future, First Interstate BancSystem's latest earnings report puts its payout ratio at 17%, showing that the company can pay out its dividends comfortably.
Over the next 3 years, EPS is forecast to fall by 4.9%. Despite that, analysts estimate the future payout ratio could be 74% over the same time period, which is in a pretty comfortable range.
First Interstate BancSystem Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The dividend has gone from an annual total of $0.52 in 2013 to the most recent total annual payment of $1.88. This means that it has been growing its distributions at 14% per annum over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.
First Interstate BancSystem May Find It Hard To Grow The Dividend
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Unfortunately things aren't as good as they seem. Unfortunately, First Interstate BancSystem's earnings per share has been essentially flat over the past five years, which means the dividend may not be increased each year.
In Summary
Overall, it's nice to see a consistent dividend payment, but we think that longer term, the current level of payment might be unsustainable. While First Interstate BancSystem is earning enough to cover the dividend, we are generally unimpressed with its future prospects. We would be a touch cautious of relying on this stock primarily for the dividend income.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Just as an example, we've come across 2 warning signs for First Interstate BancSystem you should be aware of, and 1 of them doesn't sit too well with us. 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.
