Fulton Financial Corp's Dividend Analysis
Assessing the Sustainability of Fulton Financial Corp's Dividend Payments
Fulton Financial Corp(NASDAQ:FULT) recently announced a dividend of $0.17 per share, payable on 2024-01-12, with the ex-dividend date set for 2023-12-29. 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 look into Fulton Financial Corp's dividend performance and assess its sustainability.
What Does Fulton Financial Corp Do?
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Fulton Financial is a U.S.-based financial services holding company that operates in five states: Pennsylvania, Delaware, Maryland, New Jersey, and Virginia. It offers a range of consumer and commercial banking products and services, such as checking and savings deposit products and loan products. Its services cover five distinct divisions: consumer banking, commercial banking, mortgage banking, wealth management, and other. The bank derives its revenue from non-interest income, led by its Wealth Management division.
A Glimpse at Fulton Financial Corp's Dividend History
Fulton Financial Corp has maintained a consistent dividend payment record since 1984. Dividends are currently distributed on a quarterly basis. Fulton Financial Corp has increased its dividend each year since 2009. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Fulton Financial Corp's Dividend Yield and Growth
As of today, Fulton Financial Corp currently has a 12-month trailing dividend yield of 3.67% and a 12-month forward dividend yield of 4.03%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Fulton Financial Corp's annual dividend growth rate was 4.90%. Extended to a five-year horizon, this rate increased to 5.90% per year. And over the past decade, Fulton Financial Corp's annual dividends per share growth rate stands at 7.70%.
Based on Fulton Financial Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Fulton Financial Corp stock as of today is approximately 4.89%.
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 2023-09-30, Fulton Financial Corp's dividend payout ratio is 0.36.
Fulton Financial Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Fulton Financial Corp's profitability 6 out of 10 as of 2023-09-30, 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. Fulton Financial Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Fulton Financial Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Fulton Financial Corp's revenue has increased by approximately 5.80% per year on average, a rate that underperforms approximately 52.48% 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, Fulton Financial Corp's earnings increased by approximately 7.50% per year on average, a rate that underperforms approximately 53.14% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 11.90%, which underperforms approximately 36.82% of global competitors.
Concluding Thoughts on Fulton Financial Corp's Dividends
In conclusion, Fulton Financial Corp's consistent dividend payments and growth over the years make it an attractive option for income-focused investors. The company's payout ratio and profitability rank reveal a balance between rewarding shareholders and retaining earnings for future opportunities. While growth metrics provide a mixed outlook, they do not significantly detract from the company's ability to maintain its dividend payments. Investors considering Fulton Financial Corp for its dividends should also weigh these factors to determine the long-term sustainability of their investment.
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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.
