Unveiling the Dividend Dynamics of Fulton Financial Corp (FULT)
A Comprehensive Analysis of the Company's Dividend Performance, Growth, and Sustainability
Fulton Financial Corp (NASDAQ:FULT) recently announced a dividend of $0.16 per share, payable on 2023-10-13, with the ex-dividend date set for 2023-09-29. 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 deep dive into Fulton Financial Corps dividend performance and assess its sustainability.
Understanding Fulton Financial Corp's Business Model
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Fulton Financial is a U.S.-based financial services holding company that operates in five states: Pennsylvania, Delaware, Maryland, New Jersey, and Virginia. It offers a range of consumer and commercial banking products and services, such as checking and savings deposit products and loan products. Its services cover five distinct divisions: consumer banking, commercial banking, mortgage banking, wealth management, and other. The bank derives its revenue from non-interest income, led by its Wealth Management division.
Tracing Fulton Financial Corp's Dividend History
Fulton Financial Corp has maintained a consistent dividend payment record since 1984. Dividends are currently distributed on a quarterly basis.
Fulton Financial Corp has increased its dividend each year since 2009. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years.
Deciphering Fulton Financial Corp's Dividend Yield and Growth
As of today, Fulton Financial Corp currently has a 12-month trailing dividend yield of 5.06% and a 12-month forward dividend yield of 5.30%. This suggests an expectation of increase dividend payments over the next 12 months.
Over the past three years, Fulton Financial Corp's annual dividend growth rate was 4.90%. Extended to a five-year horizon, this rate increased to 5.90% per year. And over the past decade, Fulton Financial Corp's annual dividends per share growth rate stands at 7.70%.
Based on Fulton Financial Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Fulton Financial Corp stock as of today is approximately 6.74%.
Examining the Sustainability of Fulton Financial Corp's Dividends
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 2023-06-30, Fulton Financial Corp's dividend payout ratio is 0.35.
Fulton Financial Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Fulton Financial Corp's profitability 6 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Assessing Fulton Financial Corp's Growth Prospects
To ensure the sustainability of dividends, a company must have robust growth metrics. Fulton 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 Fulton Financial Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Fulton Financial Corp's revenue has increased by approximately 5.80% per year on average, a rate that underperforms than approximately 51.93% 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, Fulton Financial Corp's earnings increased by approximately 7.30% per year on average, a rate that underperforms than approximately 53.26% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.20%, which underperforms than approximately 44.04% of global competitors.
Concluding Thoughts
With a consistent dividend payment record, a promising dividend yield, and a fair growth outlook, Fulton Financial Corp presents an intriguing case for dividend-focused investors. However, its underperformance in revenue and earnings growth compared to global competitors may warrant a more in-depth analysis. As always, investors are advised to conduct their due diligence before making investment decisions.
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This article first appeared on GuruFocus.
