Pinnacle Financial Partners' (NASDAQ:PNFP) Dividend Will Be $0.22

Pinnacle Financial Partners, Inc. (NASDAQ:PNFP) has announced that it will pay a dividend of $0.22 per share on the 30th of August. The dividend yield is 0.9% based on this payment, which is a little bit low compared to the other companies in the industry.

Check out our latest analysis for Pinnacle Financial Partners

Pinnacle Financial Partners' Dividend Forecasted To Be Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive.

Having distributed dividends for at least 10 years, Pinnacle Financial Partners has a long history of paying out a part of its earnings to shareholders. While past data isn't a guarantee for the future, Pinnacle Financial Partners' latest earnings report puts its payout ratio at 17%, showing that the company can pay out its dividends comfortably.

Looking forward, EPS is forecast to rise by 103.1% over the next 3 years. Analysts forecast the future payout ratio could be 10% over the same time horizon, which is a number we think the company can maintain.

Pinnacle Financial Partners Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the dividend has gone from $0.32 total annually to $0.88. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. Rapidly growing dividends for a long time is a very valuable feature for an income stock.

Dividend Growth May Be Hard To Achieve

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. However, Pinnacle Financial Partners' EPS was effectively flat over the past five years, which could stop the company from paying more every year. While EPS growth is quite low, Pinnacle Financial Partners has the option to increase the payout ratio to return more cash to shareholders.

Pinnacle Financial Partners Looks Like A Great Dividend Stock

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. Earnings are easily covering distributions, and the company is generating plenty of cash. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 2 warning signs for Pinnacle Financial Partners that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

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