The board of Pacific Premier Bancorp, Inc. (NASDAQ:PPBI) has announced that it will pay a dividend on the 10th of February, with investors receiving $0.33 per share. The dividend yield will be 4.3% based on this payment which is still above the industry average.
View our latest analysis for Pacific Premier Bancorp
Pacific Premier Bancorp's Dividend Forecasted To Be Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
Pacific Premier Bancorp has a short history of paying out dividends, with its current track record at only 4 years. Based on Pacific Premier Bancorp's last earnings report, calculating for its payout ratio equates to 44%, which means that the company covered its last dividend with comfortable room to spare.
EPS is set to fall by 2.8% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 48% over the same time period, which is in a pretty comfortable range.
Pacific Premier Bancorp Is Still Building Its Track Record
Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. The dividend has gone from an annual total of $0.88 in 2019 to the most recent total annual payment of $1.32. This works out to be a compound annual growth rate (CAGR) of approximately 11% a year over that time. We're not overly excited about the relatively short history of dividend payments, however the dividend is growing at a nice rate and we might take a closer look.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Pacific Premier Bancorp has impressed us by growing EPS at 13% per year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.
Pacific Premier Bancorp 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.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Case in point: We've spotted 3 warning signs for Pacific Premier Bancorp (of which 1 is potentially serious!) you should know about. 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.
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