Dividend Growth Stock Overview: Prosperity Bancshares

Prosperity Bancshares has over 240 bank branches in Texas, including
60 in Houston.
Photo: Freeimages.com/hectorjr7

About Prosperity Bancshares

Prosperity Bancshares is a bank holding company that operates over 240 full service banking locations under the name Prosperity Bank. Most of the bank locations are in Texas, with another 14 in Tulsa and Central Oklahoma. The company offers a wide variety of loans and banking products, and has more than $17 billion in deposits. Prosperity Bancshares has more than 3,000 employees and is headquartered in Houston, Texas.

Prosperity is an active real estate lender – about 30% of the loan portfolio is in commercial real estate and another 25% is in single and multi-family residential properties. The company also offers auto loans, debit and credit cards, loans for business expansion and land development, retail brokerage services, and trust and wealth management services. The company has about $1.5 billion in assets under wealth and trust management.

The company trades under the ticker symbol PB.

Prosperity Bancshares’ Dividend and Stock Split History

Prosperity Bancshares Dividends

Prosperity Bancshares has compounded dividends at 12% a year for the last decade.

Prosperity Bancshares has paid dividends since 1993 and grown them since 1999. The company announces annual dividend increases in October, with the stock going ex-dividend in December. In October 2015, Prosperity Bancshares announced a 9.9% increase to the dividend, raising the annual payout to $1.20.

Prosperity Bancshares has an excellent history of dividend growth. The company has routinely increased its dividend by more than 10% year-over-year. Over the last 5 and 10 years, Prosperity Bancshares has compounded its dividend by 11.82% and 12.33%. Since beginning its record of annual dividend increases in 1999, the average annual growth rate has been 16.29%.

The company has split its stock twice since its formation in 1983. The company executed a 4-for-1 stock split in September 1998 and a 2-for-1 stock split in June 2002.

Over the 5 years ending on December 31, 2015, Prosperity Bancshares stock appreciated at an annualized rate of 5.73%, from a split-adjusted $35.98 to $47.54. This dramatically underperformed the 10.20% compounded return of the S&P 500 index over the same period.

Prosperity Bancshares’ Direct Purchase and Dividend Reinvestment Plans

Prosperity Bancshares has both direct purchase and dividend reinvestment plans. However, to participate in either plan, you must be a current shareholder. That means that you must own shares in your own name and not that of your brokerage (i.e., “in street name”). If you do own shares in a brokerage account, you’ll have to have them issued to you and then deposited into the plan to begin participating. Once you join the plan, the minimum for additional investments is $100. The dividend reinvestment plan allows for partial reinvestment of dividends.

The plans’ fee structures are very favorable to investors. There are no fees associated with purchases of stock through the plans. When you sell your shares, you’ll pay a commission of 12 cents per share and when you withdraw from the plan or request stock certificates, you’ll be assessed a fee of $25.

Helpful Links

Prosperity Bancshares’ Investor Relations Website

Current quote and financial summary for Prosperity Bancshares (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Prosperity Bancshares

 

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