Renasant (NASDAQ:RNST) Will Pay A Dividend Of $0.22
The board of Renasant Corporation (NASDAQ:RNST) has announced that it will pay a dividend on the 30th of June, with investors receiving $0.22 per share. This payment means that the dividend yield will be 3.1%, which is around the industry average.
View our latest analysis for Renasant
Renasant's Earnings Will Easily Cover The Distributions
Solid dividend yields are great, but they only really help us if the payment is sustainable.
Renasant has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Renasant's last earnings report, the payout ratio is at a decent 28%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Over the next year, EPS is forecast to fall by 2.8%. But if the dividend continues along recent trends, we estimate the future payout ratio could be 30%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business in the future.
Renasant Has A Solid Track Record
The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The annual payment during the last 10 years was $0.68 in 2013, and the most recent fiscal year payment was $0.88. This works out to be a compound annual growth rate (CAGR) of approximately 2.6% a year over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
Renasant Could Grow Its Dividend
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Renasant has impressed us by growing EPS at 8.5% per year over the past five years. Renasant definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.
We Really Like Renasant's Dividend
In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Renasant 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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