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Popular Inc's Dividend Analysis

Exploring the Sustainability and Growth of Popular Inc's Dividends

Introduction to Popular Inc's Upcoming Dividend

Popular Inc (NASDAQ:BPOP) recently announced a dividend of $0.62 per share, payable on 2024-07-01, 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 Popular Inc's dividend performance and assess its sustainability.

What Does Popular Inc Do?

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Popular Inc, based in Puerto Rico, is a financial holding company with four main subsidiaries: Banco Popular de Puerto Rico, a bank in Puerto Rico in terms of assets; Banco Popular North America, its banking operation in the continental United States; Evertec, a data processor; and Popular Financial Holdings, a diversified financial services company. The Corporation's reportable segments consist of Banco Popular de Puerto Rico and Popular U.S.

Popular Inc's Dividend Analysis
Popular Inc's Dividend Analysis

A Glimpse at Popular Inc's Dividend History

Popular Inc has maintained a consistent dividend payment record since 2015. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

Popular Inc's Dividend Analysis
Popular Inc's Dividend Analysis

Breaking Down Popular Inc's Dividend Yield and Growth

As of today, Popular Inc currently has a 12-month trailing dividend yield of 2.67% and a 12-month forward dividend yield of 2.82%. This suggests an expectation of increased dividend payments over the next 12 months.

Over the past three years, Popular Inc's annual dividend growth rate was 12.40%. Extended to a five-year horizon, this rate increased to 18.70% per year. Based on Popular Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Popular Inc stock as of today is approximately 6.29%.

Popular Inc's Dividend Analysis
Popular Inc's Dividend Analysis

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, Popular Inc's dividend payout ratio is 0.34.

Popular Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Popular Inc's profitability 6 out of 10 as of 2024-03-31, suggesting fair profitability. The company has reported net profit in 9 years out of past 10 years.

Growth Metrics: The Future Outlook

To ensure the sustainability of dividends, a company must have robust growth metrics. Popular Inc'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 Popular Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Popular Inc's revenue has increased by approximately 12.00% per year on average, a rate that outperforms approximately 67.99% 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, Popular Inc's earnings increased by approximately 9.80% per year on average, a rate that outperforms approximately 42.51% of global competitors.

Lastly, the company's 5-year EBITDA growth rate of 12.50%, which outperforms approximately 65.84% of global competitors.

Conclusion: Reflections on Popular Inc's Dividend Strategy

Considering Popular Inc's consistent dividend payments, impressive growth in dividend rates, and strong payout ratio, the company presents a compelling case for dividend investors. The robust profitability and growth metrics further bolster confidence in the sustainability of its dividends. With these factors in mind, investors might consider whether Popular Inc fits into their long-term investment strategy. 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.