Pacific Premier Bancorp's (NASDAQ:PPBI) Dividend Will Be $0.33

Pacific Premier Bancorp, Inc. (NASDAQ:PPBI) will pay a dividend of $0.33 on the 13th of November. This makes the dividend yield 6.8%, which will augment investor returns quite nicely.

See our latest analysis for Pacific Premier Bancorp

Pacific Premier Bancorp's Earnings Will Easily Cover The Distributions

If the payments aren't sustainable, a high yield for a few years won't matter that much.

Having paid out dividends for 5 years, Pacific Premier Bancorp has a good history of paying out a part of its earnings to shareholders. Based on Pacific Premier Bancorp's last earnings report, the payout ratio is at a decent 52%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next 3 years, EPS is forecast to fall by 27.9%. Despite that, analysts estimate the future payout ratio could be 71% over the same time period, which is in a pretty comfortable range.

Pacific Premier Bancorp Doesn't Have A Long Payment History

Even though the company has been paying a consistent dividend for a while, we would like to see a few more years before we feel comfortable relying on it. The annual payment during the last 5 years was $0.88 in 2018, and the most recent fiscal year payment was $1.32. This means that it has been growing its distributions at 8.4% per annum over that time. Pacific Premier Bancorp has been growing its dividend at a decent rate, and the payments have been stable. However, the payment history is very short, so there is no evidence yet that the dividend can be sustained over a full economic cycle.

The Dividend's Growth Prospects Are Limited

The company's investors will be pleased to have been receiving dividend income for some time. Earnings has been rising at 4.1% per annum over the last five years, which admittedly is a bit slow. Growth of 4.1% per annum is not particularly high, which might explain why the company is paying out a higher proportion of earnings. This could mean the dividend doesn't have the growth potential we look for going into the future.

Our Thoughts On Pacific Premier Bancorp's Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. While Pacific Premier Bancorp is earning enough to cover the dividend, we are generally unimpressed with its future prospects. This company is not in the top tier of income providing stocks.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, Pacific Premier Bancorp has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about. Is Pacific Premier Bancorp not quite the opportunity you were looking for? Why not check out our selection of top 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.