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PNC Financial (PNC) Hikes Dividend by 20%: Worth a Look?
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The PNC Financial Services Group, Inc.’s (PNC - Free Report) board of directors has announced a 20% hike in the first-quarter 2022 dividend. The company has announced a quarterly cash dividend on the common stock of $1.50 per share, marking an increase of 25 cents per share from the fourth-quarter dividend of $1.25 per share.
The dividend will be paid out on May 5 to shareholders of record as of Apr 13, 2022.
Per management, “The significant increase in our dividend is reflective of PNC's financial performance, strong capital levels and our board's confidence in our business model and strategies.”
Prior to this, PNC had announced a 9% dividend hike in July 2021.
Considering the last day’s closing price of $181.14, PNC Financial’s dividend yield stands at 3.31%, higher than the industry average of 2.87%. Not only is the yield attractive for income investors, but also it represents a steady income stream.
Other than regular dividend payments, PNC has a share repurchase program. It plans to repurchase shares worth up to $2.9 billion for the four-quarter period beginning in the third quarter of 2021. Also, in 2021, PNC Financial returned $3 billion to shareholders through dividends on common shares of $2 billion and 5 million share repurchases amounting to $1 billion.
PNC Financial stands solid from the balance-sheet perspective. Total loans and deposits have witnessed a three-year (2019-2021) compound annual growth rate CAGR of 9.7% and 25.9%, respectively. This is expected to continue on the back of solid economic growth and improving consumer spending trends.
Supported by its earnings strength and a solid balance sheet, PNC is expected to continue with efficient capital deployment activities.
PNC Financial also remains committed to strengthening its business through strategic initiatives. In October 2021, the company completed the conversion of BBVA USA customers and employees to PNC Financial's network and platforms. The acquisition, completed in June 2021, boosted its foothold as a commercial bank in the top 30 markets of the United States. It expects to realize $900-million of savings in annual operating costs in 2022 related to the buyout.
After achieving its 2021 goal of $300 million in cost savings through its Continuous Improvement Program, the company expects to realize the same target in 2022.
Such efforts will drive its bottom line and the company will keep enhancing shareholder value.
Over the past year, shares of PNC have gained 1.4% against a 2.8% decline of the industry it belongs to.
Over the past few months, several banks have rewarded their shareholders with dividend hikes. Some of these are Northrim BanCorp (NRIM - Free Report) , Farmers National Banc Corp. (FMNB - Free Report) and BankUnited, Inc. (BKU - Free Report) .
Northrim approved a regular quarterly cash dividend of 41 cents per share, up 7.9% from its prior payout.
The dividend was paid out on Mar 18 to its shareholders of record as of Mar 10, 2022. Prior to this, NRIM hiked its dividend in August 2021 by 2.7% to 38 cents.
Farmers National announced a dividend of 16 cents per share, representing a 14.3% sequential rise. The dividend will be paid out on Mar 31 to its shareholders of record as of Mar 11, 2022.
The recent dividend hike marks the seventh consecutive quarter of an increase by Farmers National. Before this, FMNB had hiked its dividend by 27% to 14 cents per share.
BankUnited declared a quarterly cash dividend of 25 cents per share, marking a 9% increase from the prior payout.The dividend will be paid out on Apr 29 to shareholders of record as of Apr 14.
Prior to this, BKU had announced a 10% dividend hike in February 2020. That was the first time the company had announced an increase in its quarterly dividend. Before that, the bank used to pay 21 cents per share as a quarterly dividend.
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PNC Financial (PNC) Hikes Dividend by 20%: Worth a Look?
The PNC Financial Services Group, Inc.’s (PNC - Free Report) board of directors has announced a 20% hike in the first-quarter 2022 dividend. The company has announced a quarterly cash dividend on the common stock of $1.50 per share, marking an increase of 25 cents per share from the fourth-quarter dividend of $1.25 per share.
The dividend will be paid out on May 5 to shareholders of record as of Apr 13, 2022.
Per management, “The significant increase in our dividend is reflective of PNC's financial performance, strong capital levels and our board's confidence in our business model and strategies.”
Prior to this, PNC had announced a 9% dividend hike in July 2021.
Considering the last day’s closing price of $181.14, PNC Financial’s dividend yield stands at 3.31%, higher than the industry average of 2.87%. Not only is the yield attractive for income investors, but also it represents a steady income stream.
Other than regular dividend payments, PNC has a share repurchase program. It plans to repurchase shares worth up to $2.9 billion for the four-quarter period beginning in the third quarter of 2021. Also, in 2021, PNC Financial returned $3 billion to shareholders through dividends on common shares of $2 billion and 5 million share repurchases amounting to $1 billion.
PNC Financial stands solid from the balance-sheet perspective. Total loans and deposits have witnessed a three-year (2019-2021) compound annual growth rate CAGR of 9.7% and 25.9%, respectively. This is expected to continue on the back of solid economic growth and improving consumer spending trends.
Supported by its earnings strength and a solid balance sheet, PNC is expected to continue with efficient capital deployment activities.
PNC Financial also remains committed to strengthening its business through strategic initiatives. In October 2021, the company completed the conversion of BBVA USA customers and employees to PNC Financial's network and platforms. The acquisition, completed in June 2021, boosted its foothold as a commercial bank in the top 30 markets of the United States. It expects to realize $900-million of savings in annual operating costs in 2022 related to the buyout.
After achieving its 2021 goal of $300 million in cost savings through its Continuous Improvement Program, the company expects to realize the same target in 2022.
Such efforts will drive its bottom line and the company will keep enhancing shareholder value.
Over the past year, shares of PNC have gained 1.4% against a 2.8% decline of the industry it belongs to.
Image Source: Zacks Investment Research
PNC currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Banks Taking Similar Steps
Over the past few months, several banks have rewarded their shareholders with dividend hikes. Some of these are Northrim BanCorp (NRIM - Free Report) , Farmers National Banc Corp. (FMNB - Free Report) and BankUnited, Inc. (BKU - Free Report) .
Northrim approved a regular quarterly cash dividend of 41 cents per share, up 7.9% from its prior payout.
The dividend was paid out on Mar 18 to its shareholders of record as of Mar 10, 2022. Prior to this, NRIM hiked its dividend in August 2021 by 2.7% to 38 cents.
Farmers National announced a dividend of 16 cents per share, representing a 14.3% sequential rise. The dividend will be paid out on Mar 31 to its shareholders of record as of Mar 11, 2022.
The recent dividend hike marks the seventh consecutive quarter of an increase by Farmers National. Before this, FMNB had hiked its dividend by 27% to 14 cents per share.
BankUnited declared a quarterly cash dividend of 25 cents per share, marking a 9% increase from the prior payout.The dividend will be paid out on Apr 29 to shareholders of record as of Apr 14.
Prior to this, BKU had announced a 10% dividend hike in February 2020. That was the first time the company had announced an increase in its quarterly dividend. Before that, the bank used to pay 21 cents per share as a quarterly dividend.