Pacific Premier Bancorp (NASDAQ:PPBI) Is Due To Pay A Dividend Of $0.33

Pacific Premier Bancorp, Inc.'s (NASDAQ:PPBI) investors are due to receive a payment of $0.33 per share on 15th of May. This means the annual payment is 5.9% of the current stock price, which is above the average for the industry.

View our latest analysis for Pacific Premier Bancorp

Pacific Premier Bancorp's Payment Expected To Have Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable.

Pacific Premier Bancorp is just starting to establish itself as being able to pay dividends to shareholders, given its short 4-year history of distributing earnings. Taking data from Pacific Premier Bancorp's last earnings report, the payout ratio is at a decent 45%, meaning that the company is able to pay out its dividend with some room to spare.

EPS is set to fall by 2.2% over the next 12 months. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 57%, which would be comfortable for the company to continue in the future.

Pacific Premier Bancorp Is Still Building Its Track Record

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. Since 2019, the dividend has gone from $0.88 total annually to $1.32. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. Pacific Premier Bancorp has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.

Pacific Premier Bancorp Could Grow Its Dividend

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Pacific Premier Bancorp has impressed us by growing EPS at 9.2% per year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

Pacific Premier Bancorp Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Pacific Premier Bancorp might even raise payments in the future. The earnings easily cover the company's distributions, and the company is generating plenty of cash. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All of these factors considered, we think this has solid potential as a dividend stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Just as an example, we've come across 3 warning signs for Pacific Premier Bancorp you should be aware of, and 1 of them is significant. 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.