Popular, Inc. (BPOP): A High-Yield Dividend Gem with Sustainable Growth

In a market where yield-starved investors are scrambling for reliable income streams, Popular, Inc. (NASDAQ:BPOP) emerges as a compelling choice. With a 2.73% dividend yield, a 27% payout ratio, and a 7-year track record of dividend growth, this Puerto Rican financial powerhouse offers both safety and upside. Yet, the clock is ticking: shareholders must own shares before the May 29 ex-dividend date to secure the upcoming $0.70-per-share payout. This article unpacks why BPOP is a must-own dividend stock—and why waiting risks missing out.

The Dividend: A Conservative yet Generous Machine

BPOP’s dividend policy is a masterclass in balance. The company has grown its dividend annually for 7 consecutive years, with a 12.86% year-over-year dividend growth rate in the latest period. This is underpinned by a 27.22% payout ratio—far below the sector average—ensuring dividends remain sustainable even during economic downturns.

While the May 29 ex-dividend date poses a risk—miss it, and you forfeit the July 1 payout—the reward is clear. At $0.70 per share, this quarterly dividend contributes to an annual yield of 2.80%, comfortably above the S&P 500’s 1.5% average.

Why the Payout Ratio Matters: Safety in a Volatile World

BPOP’s 27% payout ratio is a shield against overextension. With earnings per share (EPS) of $9.68 over the past 12 months, the company retains 73 cents of every dollar earned for reinvestment, capital buffers, and growth. This conservatism contrasts sharply with peers that prioritize dividends at the expense of resilience.

The result? A 15.77% projected EPS growth for 2025, driven by loan growth in Puerto Rico and strong deposit inflows. Management has also repurchased $340 million of its shares since late 2024, boosting EPS through reduced share count.

Growth is Not an Afterthought: 7.8% EPS Expansion Over Five Years

While BPOP’s dividend attracts income investors, its earnings power makes it a growth buy. Over five years, its EPS has grown at an annualized rate of 7.8%, outpacing regional banks. This momentum is accelerating: the latest quarter saw EPS beat estimates by 16.9%, with management targeting a 12% Return on Tangible Common Equity (RoTCE) by year-end.

Analysts now see 16.68% EPS growth in 2026, fueled by rising interest rates and BPOP’s dominance in Puerto Rico’s mortgage and commercial lending markets.

The Ex-Dividend Date: A Clear Buy Signal

The May 29 ex-date is a critical deadline. To receive the July 1 dividend, investors must own BPOP shares by the close of May 28. Missing this window means missing $0.70 per share—a loss of income that could take months to recover.

Historically, BPOP’s stock has shown minimal post-ex-date declines, suggesting demand for its yield keeps it anchored. Yet, with the dividend yield near its 5-year high, now is the time to act.

However, a historical analysis of this timing strategy reveals mixed results. Over the 2020–2025 period, this approach delivered a compound annual growth rate (CAGR) of just 0.72%, accompanied by a maximum drawdown of -25.98%. These findings highlight the risks of market volatility even when targeting dividend events, emphasizing the need to prioritize long-term ownership over short-term timing.

Risks? Consider Them, but Don’t Overreact

No investment is risk-free. BPOP’s exposure to Puerto Rico’s economy is a double-edged sword—prosperity there fuels growth, but a downturn could hurt. However, the island’s improving fiscal health and BPOP’s $72.02 tangible book value per share (up 14% in a year) mitigate this.

The Bottom Line: Act Before May 29

BPOP is a rare blend: a high-yield dividend stock with defensible growth and conservative capital management. Its 27% payout ratio ensures dividends won’t evaporate, while 7.8%+ EPS growth positions it to outperform in any market.

With the May 29 ex-date looming, investors have a clear choice: lock in income today or risk missing it. Given BPOP’s fundamentals, the calculus is simple.

Investment Action: Buy BPOP before May 28 to secure the dividend. Pair this with a medium-term horizon to capture EPS growth, and consider averaging in if volatility arises post-ex-date. Historical backtests show that such a strategy, when held through the payout period, faced significant volatility (with a maximum drawdown of -25.98%), reinforcing the need for a disciplined, long-term approach.

In a world of fleeting yields, BPOP is a dividend stalwart with room to grow—a buy now, before the clock runs out.