The PNC Financial Services Group, Inc. (NYSE:PNC) stock is about to trade ex-dividend in 4 days. The ex-dividend date is one business day before a company’s record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn’t show on the record date. Thus, you can purchase PNC Financial Services Group’s shares before the 12th of April in order to receive the dividend, which the company will pay on the 5th of May.
The company’s next dividend payment will be US$1.55 per share, on the back of last year when the company paid a total of US$6.20 to shareholders. Last year’s total dividend payments show that PNC Financial Services Group has a trailing yield of 3.9% on the current share price of US$157.37. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether PNC Financial Services Group can afford its dividend, and if the dividend could grow.
Check out our latest analysis for PNC Financial Services Group
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Fortunately PNC Financial Services Group’s payout ratio is modest, at just 48% of profit.
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Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.
Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we’re encouraged by the steady growth at PNC Financial Services Group, with earnings per share up 7.2% on average over the last five years.
Another key way to measure a company’s dividend prospects is by measuring its historical rate of dividend growth. PNC Financial Services Group has delivered an average of 13% per year annual increase in its dividend, based on the past 10 years of dividend payments. We’re glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
The Bottom Line
From a dividend perspective, should investors buy or avoid PNC Financial Services Group? PNC Financial Services Group has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. We think this is a pretty attractive combination, and would be interested in investigating PNC Financial Services Group more closely.
Ever wonder what the future holds for PNC Financial Services Group? See what the 17 analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
A common investing mistake is buying the first interesting stock you see. Here you can find a full 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.
Source: au.finance.yahoo.com
