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If you are an income investor, then Park National Corporation (NYSEMKT:PRK) should be on your radar. Park National Corporation operates as the bank holding company for Park National Bank that provides commercial banking and trust services in Ohio and Northern Kentucky. Over the past 10 years, the US$1.6b market cap company has been growing its dividend payments, from $3.76 to $3.84. Currently yielding 3.7%, let’s take a closer look at Park National’s dividend profile.
What Is A Dividend Rock Star?
It is a stock that pays a consistent, reliable and competitive dividend over a long period of time, and is expected to continue to pay in the same manner many years to come. 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 has the ability to keep paying its dividends going forward
High Yield And Dependable
Park National’s dividend yield stands at 3.7%, 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 is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. In the case of PRK it has increased its DPS from $3.76 to $3.84 in the past 10 years. During this period it has not missed a payment, as one would expect for a company increasing its dividend. These are all positive signs of a great, reliable dividend stock.
The company currently pays out 55% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. However, going forward, analysts expect PRK’s payout to fall to 49% of its earnings, which leads to a dividend yield of 3.7%. However, EPS should increase to $7.44, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When assessing the forecast sustainability of a dividend it is also worth considering the cash flow of the business. A company with strong cash flow, relative to earnings, can sometimes sustain a high pay out ratio.
Investors of Park National can continue to expect strong dividends from the stock. With its favorable dividend characteristics, if high income generation is still the goal for your portfolio, then Park National is one worth keeping around. However, given this is purely a dividend analysis, you should always research extensively before deciding whether or not a stock is an appropriate investment for you. I always recommend analysing the company’s fundamentals and underlying business before making an investment decision. Below, I’ve compiled three relevant 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.
To help readers see past 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. For errors that warrant correction please contact the editor at firstname.lastname@example.org.