A Comprehensive Examination of PNFP's Dividend Performance and Sustainability
Pinnacle Financial Partners Inc (PNFP, Financial) recently announced a dividend of $0.22 per share, payable on 2023-11-24, with the ex-dividend date set for 2023-11-02. 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 Pinnacle Financial Partners Inc's dividend performance and assess its sustainability.
What Does Pinnacle Financial Partners Inc Do?
Pinnacle Financial Partners Inc is a financial holding company. The company operates through its wholly-owned subsidiary, Pinnacle Bank. The bank provides a full range of lending products, including commercial, real estate, and consumer loans to individuals and small to medium-sized businesses. Pinnacle operates as a community bank primarily in the urban markets of Nashville, Knoxville, Memphis, and Chattanooga, Tennessee, as well as surrounding counties. Its strategy relies heavily on mergers and acquisitions. A majority of its loan portfolio is in commercial loans, primarily real estate, as well as industrial loans. The bank generates a majority of its net revenue through net interest income.
A Glimpse at Pinnacle Financial Partners Inc's Dividend History
Pinnacle Financial Partners Inc has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a quarterly basis. The company has increased its dividend each year since 2013, earning it the status of a dividend achiever, a distinction given to companies that have increased their dividend each year for at least the past 10 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Pinnacle Financial Partners Inc's Dividend Yield and Growth
As of today, Pinnacle Financial Partners Inc currently has a 12-month trailing dividend yield of 1.41% and a 12-month forward dividend yield of 1.41%. This suggests an expectation of same dividend payments over the next 12 months. Over the past three years, Pinnacle Financial Partners Inc's annual dividend growth rate was 11.20%. Extended to a five-year horizon, this rate decreased to 8.70% per year.
Based on Pinnacle Financial Partners Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Pinnacle Financial Partners Inc stock as of today is approximately 2.14%.
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 2023-06-30, Pinnacle Financial Partners Inc's dividend payout ratio is 0.11.
Pinnacle Financial Partners Inc's profitability rank of 6 out of 10 as of 2023-06-30, suggests 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. Pinnacle Financial Partners Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Pinnacle Financial Partners Inc's revenue has increased by approximately 14.00% per year on average, a rate that outperforms than approximately 80.01% 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, Pinnacle Financial Partners Inc's earnings increased by approximately 11.20% per year on average, a rate that outperforms than approximately 57.77% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 17.90% outperforms than approximately 77.45% of global competitors.
Next Steps
In conclusion, Pinnacle Financial Partners Inc shows a promising dividend performance with a consistent payment record, a fair dividend growth rate, and a sustainable payout ratio. The company's profitability and growth metrics further solidify its position as a reliable dividend stock. However, investors should continue to monitor these factors over time to ensure the company's ability to maintain its dividend payments. 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.
