Regions Financial Corporation (NYSE:RF): Dividend Is Coming In 2 Days, Should You Buy?

If you are interested in cashing in on Regions Financial Corporation’s (NYSE:RF) upcoming dividend of US$0.14 per share, you only have 2 days left to buy the shares before its ex-dividend date, 06 September 2018, in time for dividends payable on the 01 October 2018. What does this mean for current shareholders and potential investors? Below, I will explain how holding Regions Financial can impact your portfolio income stream, by analysing the stock’s most recent financial data and dividend attributes.

View our latest analysis for Regions Financial

5 questions I ask before picking a dividend stock

When researching a dividend stock, I always follow the following screening criteria:

• Is their annual yield among the top 25% of dividend payers?

• Has its dividend been stable over the past (i.e. no missed payments or significant payout cuts)?

• Has dividend per share amount increased over the past?

• Is is able to pay the current rate of dividends from its earnings?

• Will the company be able to keep paying dividend based on the future earnings growth?

NYSE:RF Historical Dividend Yield September 3rd 18

How does Regions Financial fare?

The company currently pays out 30.0% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a higher payout ratio of 38.4%, leading to a dividend yield of 2.9%. Furthermore, EPS should increase to $1.52. The higher payout forecasted, along with higher earnings, should lead to greater dividend income for investors moving forward.

Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Whilst its per-share payments have increased during the past 10 years, there has been some hiccups. Shareholders would have seen a few years of reduced payments in this time.

Relative to peers, Regions Financial has a yield of 2.9%, which is high for Banks stocks but still below the market’s top dividend payers.

Next Steps:

With this in mind, I definitely rank Regions Financial as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three fundamental factors you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for RF’s future growth? Take a look at our free research report of analyst consensus for RF’s outlook.

2. Valuation: What is RF worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether RF is currently mispriced by the market.

3. Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.