Investigating the Sustainability and Growth of Heartland Financial USA Inc's Dividends
Heartland Financial USA Inc(NASDAQ:HTLF) recently announced a dividend of $0.3 per share, payable on 2024-02-27, with the ex-dividend date set for 2024-02-09. 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 Heartland Financial USA Inc's dividend performance and assess its sustainability.
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Heartland Financial USA Inc is a multi-bank holding company that offers a wide range of commercial, small business, and consumer banking services to businesses, including public sector and non-profit entities, and individuals. It also provides traditional and non-traditional service channels including online banking, mobile/remote banking, and telephone banking. The company's business lines are Commercial Banking, Agricultural Loans, Small Business Banking, Residential Real Estate Mortgage Lending, Consumer Banking, and Wealth Management and Retirement Plan Services.
Heartland Financial USA Inc's Dividend Analysis
A Glimpse at Heartland Financial USA Inc's Dividend History
Heartland Financial USA Inc has maintained a consistent dividend payment record since 1998. Dividends are currently distributed on a quarterly basis. Heartland Financial USA Inc has increased its dividend each year since 1998. The stock is thus listed as a dividend aristocrat, an honor that is given to companies that have increased their dividend each year for at least the past 26 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Heartland Financial USA Inc's Dividend Yield and Growth
As of today, Heartland Financial USA Inc currently has a 12-month trailing dividend yield of 3.61% and a 12-month forward dividend yield of 3.61%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Heartland Financial USA Inc's annual dividend growth rate was 17.00%. Extended to a five-year horizon, this rate increased to 20.20% per year. And over the past decade, Heartland Financial USA Inc's annual dividends per share growth rate stands at an impressive 11.50%.
Based on Heartland Financial USA Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Heartland Financial USA Inc stock as of today is approximately 9.06%.
Heartland Financial USA Inc's Dividend Analysis
The Sustainability Question: 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 2023-12-31, Heartland Financial USA Inc's dividend payout ratio is 0.27.
Heartland Financial USA Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Heartland Financial USA Inc's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Heartland Financial USA 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 Heartland Financial USA Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Heartland Financial USA Inc's revenue has increased by approximately 2.60% per year on average, a rate that underperforms than approximately 73.61% 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, Heartland Financial USA Inc's earnings increased by approximately 8.40% per year on average, a rate that underperforms than approximately 51.33% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 11.80%, which underperforms than approximately 38.28% of global competitors.
Next Steps
In conclusion, Heartland Financial USA Inc's consistent dividend payments and impressive growth rate over the years, combined with a prudent payout ratio and fair profitability, suggest a stable dividend outlook. However, considering the mixed performance in growth metrics, investors should keep an eye on the company's ability to sustain its dividend growth against the backdrop of its revenue and earnings performance. For those seeking to expand their portfolio with dividend-paying stocks, Heartland Financial USA Inc presents a case worth considering, keeping in mind the broader financial landscape and the company's strategic position within it. Will Heartland Financial USA Inc continue its dividend aristocracy in the years to come? That remains a key question for investors to ponder as they assess the company's fundamentals and future prospects.
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.
