Pacific Premier Bancorp (NASDAQ:PPBI) Is Paying Out A Dividend Of $0.33
The board of Pacific Premier Bancorp, Inc. (NASDAQ:PPBI) has announced that it will pay a dividend of $0.33 per share on the 16th of February. This makes the dividend yield 5.2%, which will augment investor returns quite nicely.
Check out our latest analysis for Pacific Premier Bancorp
Pacific Premier Bancorp's Earnings Will Easily Cover The Distributions
If the payments aren't sustainable, a high yield for a few years won't matter that much.
Pacific Premier Bancorp has a good history of paying out dividends, with its current track record at 5 years. But while this history shows that Pacific Premier Bancorp was able to sustain its dividend for a decent period of time, its most recent earnings report shows that the company's net income wasn't enough to cover dividends. This is an alarming sign for the sustainability of its dividends, as it may mean that Pacific Premier Bancorpis pulling cash from elsewhere to keep its shareholders happy.
Looking forward, earnings per share is forecast by analysts to rise exponentially over the next 3 years. They also estimate the payout ratio reaching 63% in the same time period, which is fairly sustainable.
Pacific Premier Bancorp Is Still Building Its Track Record
Pacific Premier Bancorp's dividend has been pretty stable for a little while now, but we will continue to be cautious until it has been demonstrated for a few more years. Since 2019, the annual payment back then was $0.88, compared to the most recent full-year payment of $1.32. This implies that the company grew its distributions at a yearly rate of about 8.4% over that duration. Investors will likely want to see a longer track record of growth before making decision to add this to their income portfolio.
The Dividend Has Limited Growth Potential
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, things aren't all that rosy. Earnings per share has been sinking by 32% over the last five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future. On the bright side, earnings are predicted to gain some ground over the next year, but until this turns into a pattern we wouldn't be feeling too comfortable.
We're Not Big Fans Of Pacific Premier Bancorp's Dividend
Overall, this isn't a great candidate as an income investment, even though the dividend was stable this year. The company isn't making enough to be paying as much as it is, and the other factors don't look particularly promising either. We don't think that this is a great candidate to be an income stock.
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. As an example, we've identified 3 warning signs for Pacific Premier Bancorp that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
