Yahoo Finance Piper Sandler Companies (NYSE:PIPR) Will Pay A Dividend Of $0.60
The board of Piper Sandler Companies (NYSE:PIPR) has announced that it will pay a dividend on the 7th of June, with investors receiving $0.60 per share. This payment means the dividend yield will be 1.7%, which is below the average for the industry.
See our latest analysis for Piper Sandler Companies
Piper Sandler Companies' Dividend Is Well Covered By Earnings
Even a low dividend yield can be attractive if it is sustained for years on end. However, Piper Sandler Companies' earnings easily cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.
If the trend of the last few years continues, EPS will grow by 4.9% over the next 12 months. If the dividend continues along recent trends, we estimate the payout ratio will be 65%, which is in the range that makes us comfortable with the sustainability of the dividend.
Piper Sandler Companies' Dividend Has Lacked Consistency
It's comforting to see that Piper Sandler Companies has been paying a dividend for a number of years now, however it has been cut at least once in that time. This suggests that the dividend might not be the most reliable. The annual payment during the last 7 years was $1.25 in 2017, and the most recent fiscal year payment was $3.40. This works out to be a compound annual growth rate (CAGR) of approximately 15% a year over that time. Despite the rapid growth in the dividend over the past number of years, we have seen the payments go down the past as well, so that makes us cautious.
Piper Sandler Companies May Find It Hard To Grow The Dividend
Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. However, Piper Sandler Companies has only grown its earnings per share at 4.9% per annum over the past five years. If Piper Sandler Companies is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.
An additional note is that the company has been raising capital by issuing stock equal to 20% of shares outstanding in the last 12 months. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.
In Summary
Overall, a consistent dividend is a good thing, and we think that Piper Sandler Companies has the ability to continue this into the future. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. Taking all of this into consideration, the dividend looks viable moving forward, but investors should be mindful that the company has pushed the boundaries of sustainability in the past and may do so again.
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. For example, we've picked out 3 warning signs for Piper Sandler Companies that investors should know about before committing capital to this stock. Is Piper Sandler Companies not quite the opportunity you were looking for? Why not check out our selection of top 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.
