Pinnacle Financial Partners (NASDAQ:PNFP) Has Affirmed Its Dividend Of $0.22
The board of Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) has announced that it will pay a dividend on the 25th of August, with investors receiving $0.22 per share. This means the annual payment will be 1.3% of the current stock price, which is lower than the industry average.
See our latest analysis for Pinnacle Financial Partners
Pinnacle Financial Partners' Dividend Forecasted To Be Well Covered By Earnings
While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.
Pinnacle Financial Partners has a long history of paying out dividends, with its current track record at a minimum of 10 years. Using data from its latest earnings report, Pinnacle Financial Partners' payout ratio sits at 11%, an extremely comfortable number that shows that it can pay its dividend.
Looking forward, earnings per share is forecast to fall by 0.7% over the next 3 years. However, as estimated by analysts, the future payout ratio could be 13% over the same time period, which we think the company can easily maintain.
Pinnacle Financial Partners Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2013, the annual payment back then was $0.32, compared to the most recent full-year payment of $0.88. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Pinnacle Financial Partners has grown earnings per share at 19% per year over the past five years. Pinnacle Financial Partners definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
Pinnacle Financial Partners Looks Like A Great Dividend Stock
Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Pinnacle Financial Partners that investors should know about before committing capital to this stock. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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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.
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