Should you buy PNC Financial Services Group, Inc. (NYSE:PNC) for its upcoming dividend?


Looks like PNC Financial Services Group, Inc. (NYSE:PNC) is set to go ex-dividend in the next four days. The ex-dividend date occurs one day before the record date which is the day shareholders must be on the books of the company to receive a dividend. It is important to know the ex-dividend date, because any trade in the stock must have settled by the record date. This means that you will need to buy the shares of PNC Financial Services Group by October 14 to receive the dividend, which will be paid on November 5.

The company’s next dividend payout will be $1.50 per share, following last year when the company paid a total of $6.00 to shareholders. Based on last year’s payouts, shares of PNC Financial Services Group have a yield of about 4.0% on the current share price of $151.34. We love to see companies pay out a dividend, but it’s also important to make sure that laying the golden eggs doesn’t kill our golden hen! We therefore need to check whether dividend payments are covered and whether profits are increasing.

See our latest analysis for PNC Financial Services Group

If a company pays out more dividends than it has earned, the dividend may become unsustainable – a less than ideal situation. That’s why it’s good to see PNC Financial Services Group paying out a modest 41% of its profits.

Generally speaking, the lower a company’s payout ratios, the more resilient its dividend tends to be.

Click here to see the company’s payout ratio, as well as analysts’ estimates of its future dividends.

NYSE: PNC Historic Dividend October 9, 2022

Have earnings and dividends increased?

Companies with strong growth prospects are generally the best dividend payers because it is easier to increase dividends when earnings per share improve. If business goes into a recession and the dividend is cut, the company could see its value drop precipitously. Luckily for readers, PNC Financial Services Group’s earnings per share have grown 12% annually for the past five years.

Another key way to gauge a company’s dividend outlook is to measure its historical rate of dividend growth. PNC Financial Services Group has achieved an average annual increase of 16% per year in its dividend, based on the last 10 years of dividend payments. Earnings per share and dividends have both increased rapidly lately, which is great to see.

Last takeaway

Does PNC Financial Services Group have what it takes to maintain its dividend payments? Typically, companies that grow rapidly and pay out only a small fraction of profits retain profits to reinvest in the business. Perhaps more importantly – it can sometimes indicate that management is focused on the long-term future of the business. PNC Financial Services Group ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of more attention.

On that note, you’ll want to research the risks that PNC Financial Services Group faces. To help you, we found 1 warning sign for PNC Financial Services Group which you should be aware of before investing in their stocks.

If you are looking for good dividend payers, we recommend by consulting our selection of the best dividend-paying stocks.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Valuation is complex, but we help make it simple.

Find out if PNC Financial Services Group is potentially overvalued or undervalued by viewing our full analysis, which includes fair value estimates, risks and warnings, dividends, insider trading and financial health.

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