Renasant (NASDAQ:RNST) Will Pay A Dividend Of $0.22

Renasant Corporation (NASDAQ:RNST) will pay a dividend of $0.22 on the 30th of June. This payment means that the dividend yield will be 3.1%, which is around the industry average.

See our latest analysis for Renasant

Renasant's Dividend Forecasted To Be Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Renasant has a long history of paying out dividends, with its current track record at a minimum of 10 years. Past distributions do not necessarily guarantee future ones, but Renasant's payout ratio of 28% is a good sign as this means that earnings decently cover dividends.

Looking forward, earnings per share is forecast to fall by 2.8% over the next year. But if the dividend continues along recent trends, we estimate the future payout ratio could be 30%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business in the future.

Renasant Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the annual payment back then was $0.68, compared to the most recent full-year payment of $0.88. This means that it has been growing its distributions at 2.6% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

We Could See Renasant's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. Renasant has impressed us by growing EPS at 8.5% per year over the past five years. Renasant definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Renasant 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. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for Renasant that investors need to be conscious of moving forward. 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.