Investors who want to cash in on Regions Financial Corporation’s (NYSE:RF) upcoming dividend of $0.09 per share have only 3 days left to buy the shares before its ex-dividend date, 07 June 2018, in time for dividends payable on the 02 July 2018. Investors looking for higher income-generating stocks to add to their portfolio should keep reading, as I take a deeper dive into Regions Financial’s latest financial data to analyse its dividend attributes. See our latest analysis for Regions Financial
Here’s how I find good dividend stocks
When researching a dividend stock, I always follow the following screening criteria:
- Does it pay an annual yield higher than 75% of dividend payers?
- Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
- Has the amount of dividend per share grown over the past?
- Is its earnings sufficient to payout dividend at the current rate?
- Will it have the ability to keep paying its dividends going forward?
How well does Regions Financial fit our criteria?
The company currently pays out 30.16% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 34.99%, leading to a dividend yield of 2.69%. Furthermore, EPS should increase to $1.45. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward. If there’s one type of stock you want to be reliable, it’s dividend stocks and their stable income-generating ability. Dividend payments from Regions Financial have been volatile in the past 10 years, with some years experiencing significant drops of over 25%. These characteristics do not bode well for income investors seeking reliable stream of dividends. In terms of its peers, Regions Financial produces a yield of 1.95%, which is on the low-side for Banks stocks.
If you are building an income portfolio, then Regions Financial is a complicated choice since it has some positive aspects as well as negative ones. However, if you are not strictly just a dividend investor, the stock could still offer some interesting investment opportunities. 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. There are three relevant aspects you should look at:
- Future Outlook: What are well-informed industry analysts predicting for RF’s future growth? Take a look at our free research report of analyst consensus for RF’s outlook.
- Valuation: What is RF 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 RF is currently mispriced by the market.
- 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.