Popular Raises Quarterly Dividend 20.0% to $0.90

Popular, Inc. raised its quarterly cash dividend 20.0% to $0.90 per share from $0.75. The shares traded ex-dividend on September 10, 2026. At the new quarterly rate, the annual dividend is $3.60 per share.

Why the dividend changed

The increase followed a broader capital plan outlined with Popular’s second-quarter results. Popular paired the planned dividend increase with a new common-stock repurchase authorization of up to $1 billion. The company said it had already used the $500 million authorization approved in 2025 and had repurchased about $280 million of stock during the first half of 2026. Chief Executive Javier Ferrer attributed the actions to excess capital, robust liquidity and strong financial performance. He said the dividend decision reflected confidence in the company’s capacity to produce sustainable results, according to the capital-actions announcement.

The second-quarter numbers support that explanation. Popular reported net income of $278.2 million, up from $245.7 million in the first quarter, while net interest income rose to $693.4 million from $670.2 million. Its Common Equity Tier 1 capital ratio was 16.08% at June 30, 2026, and total deposits were $70.2 billion, according to its second-quarter results. Net income continued to add to capital despite ongoing dividends and share repurchases.

Management also lifted its 2026 net-interest-income guidance to an increase of 8% to 9% for the year from 5% to 7%. It raised its quarterly non-interest-income outlook to $165 million to $170 million, while moving expected annualized net charge-offs to 65 to 80 basis points. That combination shows why management had capacity to raise the distribution while still flagging credit costs as an operating risk.

Dividend track record

The latest increase extends Popular’s dividend-growth streak to 7 consecutive years. The last annual cut occurred in 2016, so the current run follows a prior reset rather than an uninterrupted multidecade record.

The annual totals show a generally accelerating distribution. Four payments totaled $2.90 per share in 2025, raised 13.3% from $2.56 in 2024. The 2024 total had risen 12.8% from $2.27 in 2023. Earlier totals were $2.20 in 2022, $1.75 in 2021 and $1.60 in 2020. Their year-over-year increases were 25.7% in 2022, 9.4% in 2021 and 3.2% in 2023. Over five years, dividend growth annualized at 12.6%.

The recent sequence shows stepwise raises rather than changes every quarter. The ex-dividend amount was $0.70 on December 6, 2024, March 18, 2025 and May 29, 2025. It moved to $0.75 on September 12, 2025 and stayed there through May 29, 2026 before increasing to $0.90 on September 10, 2026. The pattern indicates that Popular has tended to hold the rate for several quarters, then reset it higher.

Is the dividend covered?

The dividend consumes 20% of earnings. That leaves most reported earnings retained after the common distribution and provides a substantial earnings cushion if profit weakens. The ratio also makes the size of this increase less aggressive than the 20.0% headline change might suggest in isolation.

SmarterDividends rates the dividend A, with a safety score of 79. The A grade represents a very safe assessment, meaning the low earnings payout and the company’s capacity to fund the distribution indicate limited near-term pressure on the payment. The score is a risk assessment, not a guarantee. Bank dividends also depend on capital requirements and regulatory approval of subsidiary distributions, a condition Popular identified in its capital-actions announcement.

Yield and valuation

The forward yield is 2.27% at a share price of $158.86 and an annual dividend of $3.60. That is below the Financial Services sector median forward yield of 5.70%. The lower relative yield means the increase improves BPOP’s cash income without making it a high-yielding sector outlier.

SmarterDividends estimates fair value at $355.02 and classifies the shares as undervalued, with 119% upside to that estimate. The stock rose 45.4% over one year. The fair-value figure is an estimate based on the publication’s valuation framework; it does not change the declared dividend or its coverage.

What to watch

The next operational checkpoint is Popular’s third-quarter earnings report. The key items are whether net interest income remains consistent with the updated 8% to 9% full-year growth range, whether net charge-offs track the 65-to-80-basis-point range, and how deposits develop after management said Puerto Rico public deposits should be $20 billion to $22 billion for the rest of the year.

Capital allocation is the second checkpoint. The repurchase authorization competes with dividends, organic growth and strategic investment for excess capital, although management described liquidity and capital as robust. Regulatory approvals for dividends from bank subsidiaries remain part of the funding chain to the parent company.

Leadership adds another item. Jorge J. García became chief executive on September 1, 2026, succeeding Ferrer, while Lidio V. Soriano became chief financial officer, according to the second-quarter release. The next results and management presentation will show whether the new team keeps the current capital-return framework and operating guidance unchanged.