Renasant (NASDAQ:RNST) Will Pay A Dividend Of US$0.22
Renasant Corporation (NASDAQ:RNST) has announced that it will pay a dividend of US$0.22 per share on the 30th of September. This payment means that the dividend yield will be 2.4%, which is around the industry average.
Check out our latest analysis for Renasant
Renasant's Payment Has Solid Earnings Coverage
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. Based on the last payment, Renasant was paying only paying out a fraction of earnings, but the payment was a massive 125% of cash flows. A cash payout ratio this high could put the dividend under pressure and force the company to reduce it in the future if it were to run into tough times.
EPS is set to fall by 3.3% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio could be 34%, which we consider to be quite comfortable, 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 an extended history of paying stable dividends. Since 2011, the first annual payment was US$0.68, compared to the most recent full-year payment of US$0.88. This means that it has been growing its distributions at 2.6% per annum over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.
We Could See Renasant's Dividend Growing
Investors could be attracted to the stock based on the quality of its payment history. Renasant has seen EPS rising for the last five years, at 7.4% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
In Summary
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Renasant's payments, as there could be some issues with sustaining them into the future. While Renasant is earning enough to cover the payments, the cash flows are lacking. This company is not in the top tier of income providing stocks.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Renasant that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.
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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