Yahoo Finance First BanCorp's Dividend Analysis
Exploring the Sustainability and Growth of First BanCorp's Dividends
First BanCorp (NYSE:FBP) recently announced a dividend of $0.16 per share, payable on 2024-06-14, with the ex-dividend date set for 2024-05-30. 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 First BanCorp's dividend performance and assess its sustainability.
What Does First BanCorp Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
First BanCorp is a financial holding company. The company's operating segments include Commercial and Corporate Banking; Mortgage Banking; Consumer (Retail) Banking; Treasury and Investments; United States Operations; and Virgin Islands Operations. It generates maximum revenue from the Consumer (Retail) Banking segment. This segment consists of the Corporation's consumer lending and deposit-taking activities conducted mainly through its branch network and loan centres. Geographically, it derives a majority of its revenue from Puerto Rico.
A Glimpse at First BanCorp's Dividend History
First BanCorp has maintained a consistent dividend payment record since 2018, with dividends currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down First BanCorp's Dividend Yield and Growth
As of today, First BanCorp currently has a 12-month trailing dividend yield of 3.31% and a 12-month forward dividend yield of 3.63%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, First BanCorp's annual dividend growth rate was 40.90%. Extended to a five-year horizon, this rate increased to 70.30% per year. Based on First BanCorp's dividend yield and five-year growth rate, the 5-year yield on cost of First BanCorp stock as of today is approximately 47.41%.
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 2024-03-31, First BanCorp's dividend payout ratio is 0.33. First BanCorp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks First BanCorp's profitability 6 out of 10 as of 2024-03-31, 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. First BanCorp'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 First BanCorp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. First BanCorp's revenue has increased by approximately 17.40% per year on average, a rate that outperforms approximately 81.73% 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, First BanCorp's earnings increased by approximately 43.30% per year on average, a rate that outperforms approximately 84.7% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 17.60%, which outperforms approximately 78.42% of global competitors.
Next Steps
Considering First BanCorp's consistent dividend payments, impressive dividend growth rate, manageable payout ratio, solid profitability, and robust growth metrics, the company appears well-positioned to continue rewarding investors with attractive dividend yields. Investors seeking high-dividend yield stocks might find First BanCorp a compelling pick. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
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.
