Over the past 10 years F.N.B. Corporation (
NYSE:FNB
) has been paying dividends to shareholders. Theviolin scherl and roth company is currently worth US$3.2b, and now yields roughly 4.9%. Does F.N.B tick all the boxes of a great dividend stock? Below, I’ll take you through my analysis.
View our latest analysis for F.N.B
5 checks you should use to assess a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is their annual yield among the top 25% of dividend payers?
Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?
Has dividend per share amount increased over the past?
Can it afford to pay the current rate of dividends from its earnings?
Will it have the ability to keep paying its dividends going forward?
NYSE:FNB Historical Dividend Yield January 1st 19
How well does F.N.B fit our criteria?
F.N.B has a trailing twelve-month payout ratio of 54%, which means that the dividend is covered by earnings. In the near future, analysts are predicting lower payout ratio of 40% which, assuming the share price stays the same, leads to a dividend yield of 4.9%. However, EPS should increase to $1.15, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When thinking about whether a dividend is sustainable,
another factor to consider is the cash flow
. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
If there is one thing that you want to be reliable in your life, it’s dividend stocks and their constant income stream. FNB investors will be well aware the dividend payments are lower today than they were 10 years ago, although the payments have at least been steady. However, income investors that value stability over growth may still find FNB appealing.
In terms of its peers, F.N.B generates a yield of 4.9%, which is high for Banks stocks.
Next Steps:
Keeping in mind the dividend characteristics above, F.N.B is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three key aspects you should further examine:
Future Outlook
: What are well-informed industry analysts predicting for FNB’s future growth? Take a look at our
free research report of analyst consensus
for FNB’s outlook.
Valuation
: What is FNB worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The
intrinsic value infographic in our free research report
helps visualize whether FNB is currently mispriced by the market.
Other Dividend Rockstars
: Are there better dividend payers with stronger fundamentals out there? Check out our
free list of these great stocks here
.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at
.
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