Popular Hikes Dividend: Sustainable Strategy or Short-Term Boost?

Core Insights - Popular, Inc. (BPOP) has demonstrated a strong commitment to returning value to shareholders through consistent dividend increases and share repurchase programs, reflecting confidence in its earnings and liquidity position [1][8]. Dividend Performance - Popular declared a quarterly cash dividend of 75 cents per share, representing a 7.1% increase from the previous payout [1][8]. - This follows a 12.9% increase in November 2024, bringing the total dividend hikes to five over the past five years, with an annualized growth rate of 12.77% [2]. - The current dividend yield stands at 2.3%, based on the last closing price of $121.90, supported by a prudent payout ratio of 27% [2]. Share Repurchase Strategy - In August 2024, Popular authorized a $500 million share repurchase program, with $32.8 million remaining as of June 30, 2025 [4]. - The company expanded its repurchase authorization by another $500 million in July 2025, reinforcing its commitment to capital deployment [4][8]. Liquidity Position - As of June 30, 2025, Popular's total debt was $1.4 billion, significantly lower than its liquidity balance of $6.8 billion, indicating a robust liquidity profile [5]. - This strong liquidity position is expected to support ongoing capital deployment activities, enhancing shareholder value [5][8]. Market Performance - BPOP shares have appreciated by 22.6% over the past year, outperforming the industry growth of 7.6% [9].