U.S. markets close in 4 hours 33 minutes
  • S&P 500

    4,570.68
    +57.64 (+1.28%)
     
  • Dow 30

    34,601.20
    +579.16 (+1.70%)
     
  • Nasdaq

    15,342.12
    +88.07 (+0.58%)
     
  • Russell 2000

    2,182.19
    +34.77 (+1.62%)
     
  • Crude Oil

    66.90
    +1.33 (+2.03%)
     
  • Gold

    1,767.60
    -16.70 (-0.94%)
     
  • Silver

    22.40
    +0.06 (+0.25%)
     
  • EUR/USD

    1.1315
    -0.0008 (-0.07%)
     
  • 10-Yr Bond

    1.4430
    +0.0090 (+0.63%)
     
  • GBP/USD

    1.3313
    +0.0036 (+0.27%)
     
  • USD/JPY

    113.0590
    +0.2790 (+0.25%)
     
  • BTC-USD

    56,383.23
    -2,479.36 (-4.21%)
     
  • CMC Crypto 200

    1,438.68
    -0.20 (-0.01%)
     
  • FTSE 100

    7,140.92
    -27.76 (-0.39%)
     
  • Nikkei 225

    27,753.37
    -182.25 (-0.65%)
     

Why You Might Be Interested In Popular, Inc. (NASDAQ:BPOP) For Its Upcoming Dividend

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

It looks like Popular, Inc. (NASDAQ:BPOP) is about to go ex-dividend in the next 4 days. Ex-dividend means that investors that purchase the stock on or after the 10th of December will not receive this dividend, which will be paid on the 4th of January.

Popular's next dividend payment will be US$0.40 per share, on the back of last year when the company paid a total of US$1.60 to shareholders. Looking at the last 12 months of distributions, Popular has a trailing yield of approximately 3.1% on its current stock price of $52.12. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.

View our latest analysis for Popular

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Popular paid out a comfortable 27% of its profit last year.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

historic-dividend
historic-dividend

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. With that in mind, we're not enthused to see that Popular's earnings per share have remained effectively flat over the past five years. It's better than seeing them drop, certainly, but over the long term, all of the best dividend stocks are able to meaningfully grow their earnings per share.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Popular has delivered 22% dividend growth per year on average over the past five years.

To Sum It Up

From a dividend perspective, should investors buy or avoid Popular? Earnings per share have been flat in recent years, although Popular reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. Popular ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example, we've found 2 warning signs for Popular that we recommend you consider before investing in the business.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.