Synovus Financial Corp's Dividend Analysis
Assessing the Sustainability and Growth of Synovus Financial Corp's Dividend
Synovus Financial Corp(NYSE:SNV) recently announced a dividend of $0.38 per share, payable on 2024-04-01, with the ex-dividend date set for 2024-03-20. 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 Synovus Financial Corps dividend performance and assess its sustainability.
What Does Synovus Financial Corp Do?
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Synovus Financial Corp provides commercial and consumer banking in addition to a full suite of specialized products & services such as private banking, treasury management, wealth management, mortgage services, premium finance, asset-based lending, structured lending, capital markets, & international banking to clients through the wholly-owned subsidiary bank, Synovus Bank, and other offices in Alabama, Florida, Georgia, South Carolina, and Tennessee. It has four segments: Wholesale Banking, Community Banking, Consumer Banking, and Financial Management Services, with the majority of its revenue stemming from the Wholesale banking segment.
A Glimpse at Synovus Financial Corp's Dividend History
Synovus Financial Corp has maintained a consistent dividend payment record since 1984, with dividends currently distributed on a quarterly basis. Synovus Financial Corp has increased its dividend each year since 2009, earning it the status of a dividend achiever, a distinction reserved for companies with at least 15 consecutive years of dividend increases. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Synovus Financial Corp's Dividend Yield and Growth
As of today, Synovus Financial Corp currently has a 12-month trailing dividend yield of 4.02% and a 12-month forward dividend yield of 4.02%, indicating an expectation of consistent dividend payments over the next 12 months. Over the past three years, Synovus Financial Corp's annual dividend growth rate was 4.80%, with a five-year growth rate of 7.30% per year, and a decade-long growth rate of an impressive 20.50%. Based on Synovus Financial Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Synovus Financial Corp stock as of today is approximately 5.72%.
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 2023-12-31, Synovus Financial Corp's dividend payout ratio is 0.37. Synovus Financial Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Synovus Financial Corp's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Synovus Financial Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Synovus Financial Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Synovus Financial Corp's revenue has increased by approximately 2.60% per year on average, a rate that underperforms approximately 72.11% 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, Synovus Financial Corp's earnings increased by approximately 19.60% per year on average, a rate that underperforms approximately 34.16% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 6.00%, which underperforms approximately 56.86% of global competitors.
Next Steps
In conclusion, Synovus Financial Corp's consistent dividend payment history, along with its growing dividend yield and manageable payout ratio, paints a picture of a company committed to rewarding its shareholders. While the growth metrics present a mixed outlook, the company's profitability and ability to generate net income remain solid. As value investors consider the future prospects of Synovus Financial Corp, they must weigh the importance of dividend sustainability and growth potential against the backdrop of the company's overall financial health. Will Synovus Financial Corp continue its streak of dividend increases, and how will its growth metrics evolve in the changing financial landscape? These are critical questions for investors aiming to make informed decisions. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener to find opportunities like Synovus Financial Corp.
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.
