Park National Corporation (NYSEMKT:PRK) is a true Dividend Rock Star. Its yield of 4.5% makes it one of the market's top dividend payer. In the past ten years, Park National has also grown its dividend from $3.76 to $4.24. Below, I have outlined more attractive dividend aspects for Park National for income investors who may be interested in new dividend stocks for their portfolio.
What Is A Dividend Rock Star?
It is a stock that pays a reliable and steady dividend over the past decade, at a rate that is competitive relative to the other dividend-paying companies on the market. More specifically:
- It is paying an annual yield above 75% of dividend payers
- It consistently pays out dividend without missing a payment or significantly cutting payout
- Its dividend per share amount has increased over the past
- It can afford to pay the current rate of dividends from its earnings
- It is able to continue to payout at the current rate in the future
High Yield And Dependable
Park National's yield sits at 4.5%, which is high for Banks stocks. But the real reason Park National stands out is because it has a proven track record of continuously paying out this level of dividends, from earnings, to shareholders and can be expected to continue paying in the future. This is a highly desirable trait for a stock holding if you're investor who wants a robust cash inflow from your portfolio over a long period of time.
If there's one type of stock you want to be reliable, it's dividend stocks and their stable income-generating ability. In the case of PRK it has increased its DPS from $3.76 to $4.24 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. This is an impressive feat, which makes PRK a true dividend rockstar.
Park National has a trailing twelve-month payout ratio of 54%, meaning the dividend is sufficiently covered by earnings. In the near future, analysts are predicting a payout ratio of 50% which, assuming the share price stays the same, leads to a dividend yield of around 4.1%. Furthermore, EPS is forecasted to fall to $6.95 in the upcoming year.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. Companies with strong cash flow can sustain a higher payout ratio, while companies with weaker cash flow generally cannot.
With Park National producing strong dividend income for your portfolio over the past few years, you can take comfort in knowing that this stock will still continue to be a top dividend generator moving forward. However, given this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. I've put together three key aspects you should further research:
- Future Outlook: What are well-informed industry analysts predicting for PRK’s future growth? Take a look at our free research report of analyst consensus for PRK’s outlook.
- Valuation: What is PRK worth today? Even if the stock is a cash cow, it's not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether PRK is currently mispriced by the market.
- Other Dividend Rockstars: Are there strong dividend payers with better fundamentals out there? Check out our free list of these great stocks here.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.