Understanding the Sustainability and Growth of Renasant Corp's Dividends
Renasant Corp (RNST, Financial) recently announced a dividend of $0.22 per share, payable on 2024-01-01, with the ex-dividend date set for 2023-12-15. 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 Renasant Corp's dividend performance and assess its sustainability.
What Does Renasant Corp Do?
Renasant Corp operates as a holding company for Renasant Bank, a Mississippi banking corporation, and its subsidiary, Renasant Insurance, Inc. It has three reportable segments: community banks, insurance, and wealth management. With its community banks segment, the company provides a range of financial services to individuals and small businesses. Its insurance segment is an insurance agency providing commercial and personal insurance through third-party carriers. The wealth management segment provides a range of services including money management and retirement planning. The majority of the company's revenue is driven by lending activities in its community banks segment. Renasant Corporation operates in the southern United States.
A Glimpse at Renasant Corp's Dividend History
Renasant Corp has maintained a consistent dividend payment record since 1993. Dividends are currently distributed on a quarterly basis. Renasant Corp has increased its dividend each year since 1993. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 30 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Renasant Corp's Dividend Yield and Growth
As of today, Renasant Corp currently has a 12-month trailing dividend yield of 2.58% and a 12-month forward dividend yield of 2.58%. This suggests an expectation of the same dividend payments over the next 12 months.
Over the past three years, Renasant Corp's annual dividend growth rate was 0.40%. Extended to a five-year horizon, this rate increased to 3.60% per year. And over the past decade, Renasant Corp's annual dividends per share growth rate stands at 3.40%.
Based on Renasant Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Renasant Corp stock as of today is approximately 3.08%.
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 2023-09-30, Renasant Corp's dividend payout ratio is 0.30.
Renasant Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Renasant Corp's profitability 6 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported positive net income for each 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. Renasant 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 Renasant Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Renasant Corp's revenue has increased by approximately 3.20% per year on average, a rate that underperforms approximately 69.31% 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, Renasant Corp's earnings increased by approximately 1.20% per year on average, a rate that underperforms approximately 73.77% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 4.00%, which underperforms approximately 65.16% of global competitors.
Next Steps
In conclusion, Renasant Corp's consistent dividend increase over the years positions it as a dividend aristocrat, an attractive feature for value investors. The company's moderate dividend yield, combined with a steady growth in dividend per share and a prudent payout ratio, portrays a balanced approach to shareholder returns and business reinvestment. Renasant Corp's profitability rank reflects a stable financial foundation, although its growth metrics suggest there is room for improvement when compared to industry peers. Investors should weigh these factors when considering the long-term sustainability of Renasant Corp's dividends. For those seeking to expand their portfolio with dividend-paying stocks, GuruFocus Premium users can leverage the High Dividend Yield Screener to find opportunities that align with their investment goals.
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.
