Renasant (NYSE:RNST) Is Due To Pay A Dividend Of $0.22

Renasant Corporation (NYSE:RNST) has announced that it will pay a dividend of $0.22 per share on the 30th of June. Based on this payment, the dividend yield will be 2.8%, which is fairly typical for the industry.

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Renasant's Payment Expected To Have Solid Earnings Coverage

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 27% is a good sign as this means that earnings decently cover dividends.

Over the next year, EPS is forecast to expand by 5.0%. If the dividend continues along recent trends, we estimate the future payout ratio will be 28%, which is in the range that makes us comfortable with the sustainability of the dividend.

See our latest analysis for Renasant

Renasant Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of $0.68 in 2015 to the most recent total annual 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.

The Dividend Has Growth Potential

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Renasant has seen EPS rising for the last five years, at 7.5% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Renasant's prospects of growing its dividend payments in the future.

We should note that Renasant has issued stock equal to 13% of shares outstanding. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.

Renasant Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Renasant might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 6 analysts we track are forecasting for Renasant for free with public analyst estimates for the company. 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.