Popular's Liquidity Cushion: Can It Sustain Higher Capital Returns?

Popular, Inc. BPOP continues to strengthen its capital distribution strategy through higher dividends and share repurchases. In recent years, the company has steadily enhanced its payout profile while maintaining a solid liquidity position.

On July 23, 2026, the company announced plans to increase its quarterly common stock dividend by 20% to 90 cents per share. The higher dividend is expected to be payable in the fourth quarter of 2026, subject to board approval. Before this, BPOP raised its dividend by 7.1% to 75 cents per share in August 2025. Over the past five years, Popular has raised its dividend four times, with an annualized growth rate of 10.9%.

Currently, the company’s dividend yield stands at 1.7%, backed by a prudent payout ratio of 20%. This suggests that the company retains sufficient earnings for reinvestment and future growth initiatives while maintaining consistent shareholder returns.

Dividend Yield

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Additionally, Popular has been actively returning capital through share repurchases. As of June 30, 2026, it had fully utilized the $500 million repurchase authorization approved in July 2025. In addition to the planned dividend hike, the company authorized a new $1 billion share repurchase program, reinforcing its focus on returning capital to shareholders.

Meanwhile, Popular’s liquidity profile remains robust. As of June 30, 2026, the company had short-term debt of $1.1 billion, with no long-term debt, significantly lower than its liquidity balance of $4.9 billion.

Given its expected dividend increase, expanded buyback authorization and solid liquidity, Popular is well-positioned to boost shareholder returns while retaining financial flexibility for future growth.

Where Do Popular’s Peers Stand in Terms of Capital Returns?

Similar to Popular, its peers Northern Trust Corporation NTRS and M&T Bank Corporation MTB have also strengthened shareholder returns through dividend increases and buybacks.

Following the successful completion of the Federal Reserve’s 2026 stress test, Northern Trust raised its quarterly dividend 10% to 88 cents per share in July 2026. The company also has a $2.5 billion buyback authorization with no expiration date, with 1.29 million shares remaining available as of June 30, 2026.

Meanwhile, M&T Bank raised its quarterly dividend 11.1% to $1.50 per share in August 2025. In March 2026, it authorized a new buyback program of up to $5 billion, with nearly $4.5 billion remaining available as of June 30, 2026.

BPOP’s Price Performance and Zack Rank

Shares of BPOP have gained 47.1% in the past year compared with the industry’s growth of 13.6%.

Price Performance

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Popular currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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