A Comprehensive Examination of FIBK's Dividend Performance and Sustainability
First Interstate BancSystem Inc(NASDAQ:FIBK) recently announced a dividend of $0.47 per share, payable on 2023-11-16, with the ex-dividend date set for 2023-11-03. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into First Interstate BancSystem Incs dividend performance and assess its sustainability.
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First Interstate BancSystem Inc is a financial holding company. It is the parent company of First Interstate Bank, a community bank offering a range of internet, mobile, and other banking and financial services throughout Idaho, Montana, Oregon, South Dakota, Washington, and Wyoming. It delivers a range of financial products and services to both retail and commercial customers in industries like agriculture, construction, education, energy, governmental services, healthcare, mining, professional services, retail, tourism, and wholesale trade. It generates a majority of income from interest charged on loans, and interest and dividends earned on investments.
First Interstate BancSystem Inc's Dividend Analysis
First Interstate BancSystem Inc's Dividend History
First Interstate BancSystem Inc has maintained a consistent dividend payment record since 2010. Dividends are currently distributed on a quarterly basis.
First Interstate BancSystem Inc has increased its dividend each year since 2013. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 10 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
First Interstate BancSystem Inc's Dividend Analysis
First Interstate BancSystem Inc's Dividend Yield and Growth
As of today, First Interstate BancSystem Inc currently has a 12-month trailing dividend yield of 7.60% and a 12-month forward dividend yield of 7.60%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, First Interstate BancSystem Inc's annual dividend growth rate was 11.10%. Extended to a five-year horizon, this rate increased to 12.50% per year. And over the past decade, First Interstate BancSystem Inc's annual dividends per share growth rate stands at an impressive 14.90%.
Based on First Interstate BancSystem Inc's dividend yield and five-year growth rate, the 5-year yield on cost of First Interstate BancSystem Inc stock as of today is approximately 13.70%.
First Interstate BancSystem Inc's Dividend Analysis
Assessing Dividend Sustainability: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, First Interstate BancSystem Inc's dividend payout ratio is 0.64.
First Interstate BancSystem Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks First Interstate BancSystem Inc's profitability 6 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Future Prospects: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. First Interstate BancSystem Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and First Interstate BancSystem Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. First Interstate BancSystem Inc's revenue has increased by approximately 2.30% per year on average, a rate that underperforms than approximately 73.9% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, First Interstate BancSystem Inc's earnings increased by approximately -1.70% per year on average, a rate that underperforms than approximately 79.91% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 3.20%, which underperforms than approximately 67.44% of global competitors.
Conclusion
First Interstate BancSystem Inc has shown a commendable commitment to its dividend payments, exhibiting consistent growth and a robust yield. However, its payout ratio and growth metrics suggest that there may be challenges ahead in maintaining this performance. It is crucial for potential investors to consider these factors and monitor the company's future earnings and revenue growth. Will First Interstate BancSystem Inc continue to uphold its dividend achiever status? Only time will tell.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
