PacWest Bancorp (NASDAQ:PACW): Dividend Is Coming In 3 Days, Should You Buy?
Have you been keeping an eye on PacWest Bancorp’s (NASDAQ:PACW) upcoming dividend of $0.5 per share payable on the 28 February 2018? Then you only have 3 days left before the stock starts trading ex-dividend on the 16 February 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding PacWest Bancorp can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes. View our latest analysis for PacWest Bancorp
How I analyze a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is it paying an annual yield above 75% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has dividend per share amount increased over the past?
Does earnings amply cover its dividend payments?
Will the company be able to keep paying dividend based on the future earnings growth?
How well does PacWest Bancorp fit our criteria?
PacWest Bancorp has a trailing twelve-month payout ratio of 68.78%, which means that the dividend is covered by earnings. However, going forward, analysts expect PACW’s payout to fall to 57.68% of its earnings, which leads to a dividend yield of 4.18%. However, EPS should increase to $3.5, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment. If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Although PACW’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again. Relative to peers, PacWest Bancorp produces a yield of 3.88%, which is high for Banks stocks.
Next Steps:
With this in mind, I definitely rank PacWest Bancorp as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three key aspects you should further examine:
1. Future Outlook: What are well-informed industry analysts predicting for PACW’s future growth? Take a look at our free research report of analyst consensus for PACW’s outlook.
2. Valuation: What is PACW 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 PACW is currently mispriced by the market.
3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
