Popular Inc's Dividend Analysis
Assessing the Sustainability of Popular Inc's Dividend Payments
Popular Inc (NASDAQ:BPOP) recently announced a dividend of $0.62 per share, payable on 2024-01-02, with the ex-dividend date set for 2023-12-06. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Popular Inc's dividend performance and assess its sustainability.
What Does Popular Inc Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Popular Inc, based in Puerto Rico, is a financial holding company with four main subsidiaries: Banco Popular de Puerto Rico, the largest bank in Puerto Rico in terms of assets; Banco Popular North America, its banking operation in the continental United States; Evertec, a data processor; and Popular Financial Holdings, a diversified financial services company. Popular recently restructured PFH and moved much of its activities into BPNA.
A Glimpse at Popular Inc's Dividend History
Popular Inc has maintained a consistent dividend payment record since 2015. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Popular Inc's Dividend Yield and Growth
As of today, Popular Inc currently has a 12-month trailing dividend yield of 2.82% and a 12-month forward dividend yield of 3.15%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Popular Inc's annual dividend growth rate was 22.40%. Extended to a five-year horizon, this rate decreased to 18.40% per year. Based on Popular Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Popular Inc stock as of today is approximately 6.56%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Popular Inc's dividend payout ratio is 0.23.
Popular Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Popular Inc's profitability 5 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 9 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Popular Inc's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Popular Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Popular Inc's revenue has increased by approximately 16.00% per year on average, a rate that outperforms approximately 84.62% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Popular Inc's earnings increased by approximately 28.90% per year on average, a rate that outperforms approximately 85.79% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 53.70%, which outperforms approximately 97.53% of global competitors.
Next Steps
In conclusion, Popular Inc's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics paint a picture of a company with a solid dividend profile. The consistent dividend history, coupled with a fair yield and robust growth rates, suggests that Popular Inc's dividends could be sustainable in the foreseeable future. Investors and potential GuruFocus.com members should consider these factors when making informed financial decisions. Will Popular Inc continue to reward its shareholders with growing dividends? Only time will tell, but the current indicators are promising. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
