Pinnacle Financial Partners (NASDAQ:PNFP) Will Pay A Dividend Of $0.22
The board of Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) has announced that it will pay a dividend on the 23rd of February, with investors receiving $0.22 per share. This means the annual payment will be 1.0% of the current stock price, which is lower than the industry average.
While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Pinnacle Financial Partners' stock price has increased by 39% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.
Check out 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 established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. While past data isn't a guarantee for the future, Pinnacle Financial Partners' latest earnings report puts its payout ratio at 12%, showing that the company can pay out its dividends comfortably.
Over the next 3 years, EPS is forecast to expand by 53.2%. Analysts forecast the future payout ratio could be 9.8% over the same time horizon, which is a number we think the company can maintain.
Pinnacle Financial Partners Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.32 in 2014 to the most recent total annual 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.
We Could See Pinnacle Financial Partners' Dividend Growing
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Pinnacle Financial Partners has seen EPS rising for the last five years, at 9.1% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Pinnacle Financial Partners' prospects of growing its dividend payments in the future.
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. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 1 warning sign for Pinnacle Financial Partners that investors need to be conscious of moving forward. 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.
