Be Sure To Check Out Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) Before It Goes Ex-Dividend

It looks like Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) is about to go ex-dividend in the next two days. You will need to purchase shares before the 4th of February to receive the dividend, which will be paid on the 26th of February.

Pinnacle Financial Partners's next dividend payment will be US$0.18 per share. Last year, in total, the company distributed US$0.72 to shareholders. Calculating the last year's worth of payments shows that Pinnacle Financial Partners has a trailing yield of 1.1% on the current share price of $68.53. 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 investigate whether Pinnacle Financial Partners can afford its dividend, and if the dividend could grow.

Check out our latest analysis for Pinnacle Financial Partners

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Pinnacle Financial Partners has a low and conservative payout ratio of just 16% of its income after tax.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

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

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see Pinnacle Financial Partners earnings per share are up 9.4% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Pinnacle Financial Partners has delivered an average of 12% per year annual increase in its dividend, based on the past seven years of dividend payments. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

Final Takeaway

Has Pinnacle Financial Partners got what it takes to maintain its dividend payments? It has been growing its earnings per share somewhat in recent years, although it reinvests more than half its earnings in the business, which could suggest there are some growth projects that have not yet reached fruition. We think this is a pretty attractive combination, and would be interested in investigating Pinnacle Financial Partners more closely.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. To help with this, we've discovered 2 warning signs for Pinnacle Financial Partners that you should be aware of before investing in their shares.

A common investment mistake is buying the first interesting stock you see. Here you can find a list of promising dividend stocks with a greater than 2% yield and an upcoming dividend.

When trading Pinnacle Financial Partners or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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