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Should You Hold Regions Financial (RF) for Its Dividend Yield?
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Regions Financial Corporation (RF - Free Report) is one solid dividend-yielding stock that investors should consider holding in their portfolios amid hovering recession fears in the near term.
The Birmingham, AL-based financial holding company provides retail, and commercial and mortgage banking, as well as other financial services.
RF has been paying quarterly dividends on a regular basis, along with occasional raises. The last hike of 20% to 24 cents per share was announced in July 2023. Over the past five years, it has increased dividends four times, with an annualized dividend growth rate of 8.06%.
Considering last day’s closing price of $17.81 per share, the company’s current dividend yield stands at 5.4%. This is impressive compared with the industry’s average of 2.97% and attracts investors as it represents a steady income stream.
Regions Financial Corporation Dividend Yield (TTM)
Apart from dividends, RF has a share repurchase program in place. In April 2022, Regions Financial’s board of directors announced a share repurchase program of up to $2.5 billion of common stock from second-quarter 2022 through fourth-quarter 2024. As of Jun 30, 2023, the company repurchased 725,000 shares for $15 million under this share repurchase plan. Such steady capital distribution activities are likely to stoke investors’ confidence in the stock.
As of Jun 30, 2023, it had long-term borrowings of $4.29 billion, whereas its liquidity sources aggregated $52.9 billion. With a record of decent earnings strength and decent cash levels, dividend payments seem sustainable.
Further, RF’s strong fundamentals make it an impressive investment option. Net interest income (NII) witnessed a compound annual growth rate of 8.5% over the last three years (2019-2022), with the uptrend continuing in the first half of 2023. The improvement in NII was driven by higher interest rates and solid average loan balance trends, partially offset by higher deposit and funding costs.
Regions Financial is focused on expanding and diversifying its business operations on the back of investments in varied product offerings and through inorganic expansion efforts. In 2021, the company acquired Clearsight, Sabal Capital and EnerBank USA, which diversified its revenue sources.
However, RF’s escalating expenses are likely to hinder bottom-line growth in the upcoming period. Also, loan concentration (57.9% of the total commercial loans in the total loan portfolio) amid an uncertain economy and declining mortgage income are near-term woes.
Over the past three months, shares of RF have gained 3.8% compared with the industry‘s rise of 3.1%.
Banking stocks like Huntington BancsharesIncorporated (HBAN - Free Report) and KeyCorp (KEY - Free Report) are worth a look as these, too, have robust dividend yields.
Considering the last day’s closing price, HBAN’s dividend yield is pegged at 5.9%. In the past three months, shares of HBAN have gained 1.8%.
Based on the last day’s closing price, KEY’s dividend yield is pinned at 7.4%. In the past three months, shares of KEY have declined 15.5%.
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Should You Hold Regions Financial (RF) for Its Dividend Yield?
Regions Financial Corporation (RF - Free Report) is one solid dividend-yielding stock that investors should consider holding in their portfolios amid hovering recession fears in the near term.
The Birmingham, AL-based financial holding company provides retail, and commercial and mortgage banking, as well as other financial services.
RF has been paying quarterly dividends on a regular basis, along with occasional raises. The last hike of 20% to 24 cents per share was announced in July 2023. Over the past five years, it has increased dividends four times, with an annualized dividend growth rate of 8.06%.
Considering last day’s closing price of $17.81 per share, the company’s current dividend yield stands at 5.4%. This is impressive compared with the industry’s average of 2.97% and attracts investors as it represents a steady income stream.
Regions Financial Corporation Dividend Yield (TTM)
Regions Financial Corporation dividend-yield-ttm | Regions Financial Corporation Quote
Apart from dividends, RF has a share repurchase program in place. In April 2022, Regions Financial’s board of directors announced a share repurchase program of up to $2.5 billion of common stock from second-quarter 2022 through fourth-quarter 2024. As of Jun 30, 2023, the company repurchased 725,000 shares for $15 million under this share repurchase plan. Such steady capital distribution activities are likely to stoke investors’ confidence in the stock.
As of Jun 30, 2023, it had long-term borrowings of $4.29 billion, whereas its liquidity sources aggregated $52.9 billion. With a record of decent earnings strength and decent cash levels, dividend payments seem sustainable.
Further, RF’s strong fundamentals make it an impressive investment option. Net interest income (NII) witnessed a compound annual growth rate of 8.5% over the last three years (2019-2022), with the uptrend continuing in the first half of 2023. The improvement in NII was driven by higher interest rates and solid average loan balance trends, partially offset by higher deposit and funding costs.
Regions Financial is focused on expanding and diversifying its business operations on the back of investments in varied product offerings and through inorganic expansion efforts. In 2021, the company acquired Clearsight, Sabal Capital and EnerBank USA, which diversified its revenue sources.
However, RF’s escalating expenses are likely to hinder bottom-line growth in the upcoming period. Also, loan concentration (57.9% of the total commercial loans in the total loan portfolio) amid an uncertain economy and declining mortgage income are near-term woes.
Over the past three months, shares of RF have gained 3.8% compared with the industry‘s rise of 3.1%.
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RF currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Bank Stocks With Attractive Dividend Yields
Banking stocks like Huntington Bancshares Incorporated (HBAN - Free Report) and KeyCorp (KEY - Free Report) are worth a look as these, too, have robust dividend yields.
Considering the last day’s closing price, HBAN’s dividend yield is pegged at 5.9%. In the past three months, shares of HBAN have gained 1.8%.
Based on the last day’s closing price, KEY’s dividend yield is pinned at 7.4%. In the past three months, shares of KEY have declined 15.5%.