Updated 3/13/25
Peoples Bancorp Inc. (NASDAQ: PEBO) is a regional bank based in Marietta, Ohio, serving communities throughout the Midwest. As a banking institution, it offers everything from loans and deposits to investment and insurance services. While it may not be a household name, this bank has built a reputation for stability and steady growth over the years.
For dividend investors, regional banks can be attractive because they often pay consistent dividends backed by strong local economies. With a market cap of around $1.05 billion, PEBO falls into the small-cap category, but it’s big enough to provide the kind of financial stability that long-term investors appreciate.
So, is PEBO a good fit for an income-focused portfolio? Let’s break down the dividend metrics and financial health to see if it deserves a spot on your watchlist.
Key Dividend Metrics
📈 Dividend Yield: 5.46% (above the 5-year average of 5.20%)
💰 Annual Dividend: $1.60 per share
📅 Last Dividend Payment: February 18, 2025
⚠ Payout Ratio: 48.04% (reasonable and sustainable)
📊 Dividend Growth: Consistent but moderate
⏳ Ex-Dividend Date: February 3, 2025
Dividend Overview
Dividend investors look for consistency, and Peoples Bancorp delivers just that. The current yield sits at 5.46%, which is slightly higher than its five-year average, making it an attractive option for those seeking steady income.
The bank pays an annual dividend of $1.60 per share, which isn’t flashy, but it’s reliable. The payout ratio is 48.04%, meaning the company is using less than half of its earnings to fund dividends. That leaves some room for future increases while still maintaining financial flexibility.
For those who rely on dividends for passive income, this level of stability is important. Some high-yield stocks can be risky if they’re paying out too much of their earnings, but PEBO seems to strike a healthy balance.
Dividend Growth and Safety
One of the biggest questions dividend investors ask is whether a stock can keep growing its payouts over time. PEBO has a history of modest but steady increases, which aligns with what you’d expect from a well-managed regional bank.
What makes the dividend safe?
✅ A manageable payout ratio under 50%
✅ Strong revenue growth (35.4% year-over-year)
⚠ A recent decline in earnings (-20.4% quarterly year-over-year)
The revenue boost is a positive sign, but the earnings drop is something to keep an eye on. A one-time dip isn’t necessarily a concern, but if profits continue to shrink, it could limit the bank’s ability to increase dividends in the future.
Chart Analysis
The stock chart for Peoples Bancorp Inc. (PEBO) shows a shift in momentum over the past several months, with a noticeable downturn in recent weeks. The price action suggests a loss of bullish strength, and technical indicators are starting to show signs of further weakness.
Moving Averages
The 50-day simple moving average (SMA) has been trending downward after peaking a few months ago, while the 200-day SMA has remained relatively stable with a slight upward slope. This recent crossover, where the stock price has dropped below both the 50-day and 200-day moving averages, often signals a bearish trend.
Earlier in the chart, there was a clear uptrend, with the price consistently holding above the 50-day SMA, suggesting strong momentum. However, as the stock began to roll over, the 50-day SMA started to lose steam and is now curling downward. The fact that the stock has dropped below the 200-day SMA is significant because it could indicate a longer-term shift in sentiment.
Volume Trends
Volume has been relatively steady, with occasional spikes on both green (buying) and red (selling) days. However, what stands out is that recent selling pressure has come with an increase in volume, suggesting that more investors are participating in the downside move.
A major volume spike occurred in late October, which coincided with a sharp upward price movement, likely driven by earnings or a major event. Since then, volume has tapered off slightly but remains active, showing that there is still interest in the stock, even as it declines.
Relative Strength Index (RSI)
The RSI indicator at the bottom of the chart is trending downward and approaching oversold levels. Historically, when RSI moves below 30, it signals that a stock may be oversold and due for a bounce. However, the fact that RSI has been weakening for a prolonged period suggests that selling pressure has remained dominant.
If RSI stabilizes and starts to turn higher, it could indicate that the selling momentum is fading, but for now, it is still pointing lower.
Recent Price Action
The last few candles show a series of lower highs and lower lows, a classic sign of a downtrend. The most recent trading session had a relatively small price range, closing at 29.38, near the low of the day. This kind of price action can sometimes indicate that selling is slowing down, but it is too early to confirm a reversal.
The stock is now trading below the major moving averages, and unless buyers step in with conviction, the next key support level could come into play. If the price continues to drift lower, it could test previous support areas from earlier in the year.
Analyst Ratings
Peoples Bancorp Inc. (PEBO) has recently been the focus of both optimistic and cautious analyst reviews. Some see upside potential, while others highlight risks. Here’s a look at the latest upgrades and downgrades, along with the current analyst price target.
📈 Upgrades
Several analysts have taken a bullish stance on PEBO, with six buy ratings and four hold ratings over the past few months. Notably, there are no sell ratings, suggesting that most experts see stability in the stock. The consensus price target sits at 38.00, which implies potential upside from the current price.
🟢 Why Analysts Are Upgrading
✅ Strong revenue growth – A 35.4 percent year-over-year revenue increase shows solid business momentum.
✅ Attractive dividend yield – The 5.46 percent yield makes this stock appealing for income-focused investors.
✅ Consistent profitability – The return on equity of 10.83 percent indicates that management is effectively generating returns for shareholders.
📉 Downgrades
Some analysts, however, are taking a more cautious approach. The consensus rating currently leans toward hold, with five analysts issuing hold ratings, compared to two buy ratings. The average price target from these analysts falls around 36.90, with estimates ranging between 31.00 and 40.00.
🔴 Why Analysts Are Downgrading
⚠ Earnings decline – Despite higher revenue, quarterly earnings dropped 20.4 percent year-over-year, raising concerns about profitability.
⚠ Net interest margin compression – The bank’s net interest margin fell to 4.15 percent in Q4 2024 from 4.27 percent in the prior quarter, which could pressure future earnings.
⚠ Higher credit loss provisions – The company set aside 6.3 million for credit losses, which may suggest rising risks in its loan portfolio.
🎯 Consensus Price Target
The average analyst price target for PEBO is currently 36.90 to 38.00, indicating a potential upside of about 26 percent from the latest price of 29.38. However, while some see value in the stock, others are concerned about profitability trends and loan performance. Investors should weigh the potential reward against the possible risks before making a decision.
Earning Report Summary
Peoples Bancorp Inc. (PEBO) wrapped up the fourth quarter of 2024 with solid financial results, reporting net income of $26.9 million, or $0.76 per diluted share. For the full year, earnings came in at $116.19 million, translating to $3.31 per share. While the numbers suggest stability, there were some areas where growth slowed a bit.
Net Interest Income and Margins
The bank saw a small increase in net interest income, up about 3% from the previous year. However, the net interest margin dipped slightly to 4.15% from 4.27% in the previous quarter. This was mainly due to lower accretion income, which put a bit of pressure on margins. While it’s not a major red flag, it’s something to watch going forward.
Non-Interest Income and Expenses
On the non-interest income side, PEBO continued to bring in solid revenue from its fee-based services. Meanwhile, expenses stayed under control, which is always a good sign. The bank has been focusing on keeping costs in check, which helped offset some of the challenges from margin pressure.
Loan and Deposit Growth
Lending activity remained strong, with the total loan portfolio reaching $6.4 billion. Deposits also grew to $7.6 billion, showing that customers continue to trust the bank. A strong deposit base is crucial, especially in uncertain economic times, and PEBO seems to be in a good position on that front.
Credit Quality and Reserves
The bank’s credit quality looked stable, with non-performing assets remaining low. That’s always reassuring for investors since it suggests that loan defaults aren’t a major issue. PEBO did set aside $6.3 million for potential credit losses, which is a precautionary move to cover any potential future risks.
Capital Strength and Dividends
Capital levels remain healthy, and the bank is sitting on a solid financial foundation. To reward shareholders, the board declared a quarterly dividend of $0.40 per share, payable on February 18, 2025. That puts the annualized dividend yield at around 5.11%, which is an attractive payout for income-focused investors.
Looking Ahead
Overall, PEBO continues to show financial strength, even with some margin pressure and earnings fluctuations. With steady lending, a solid deposit base, and a focus on efficiency, the bank appears to be in a good position to navigate any challenges ahead. Investors will be watching how interest rates impact margins in the coming quarters, but for now, Peoples Bancorp is holding steady.
Financial Health and Stability
A company’s ability to keep paying dividends comes down to its financial strength. Looking at PEBO’s balance sheet, there are a few encouraging signs.
The bank’s book value per share sits at $31.99, which is slightly above its current stock price of $29.38. That suggests it might be undervalued based on its assets, which could make it appealing to value investors.
Cash reserves total $236.41 million, while debt comes in at $459.56 million. That’s a fairly typical setup for a bank, which relies on borrowing to fund lending operations. As long as loan losses remain under control, the debt level shouldn’t be a major concern.
Looking at profitability, the return on equity (ROE) is 10.83%, and the profit margin is 20.73%. Those numbers indicate that PEBO is generating decent returns, though they’re not at the top of the industry.
Valuation and Stock Performance
PEBO trades at 8.88 times trailing earnings and 9.80 times forward earnings, making it relatively cheap compared to many other dividend-paying stocks.
How has the stock performed?
📉 52-Week High: $37.07
📈 52-Week Low: $26.74
🔄 Current Price: $29.38
📊 50-Day Moving Average: $31.89
📊 200-Day Moving Average: $31.50
The stock has struggled recently, trading below both its 50-day and 200-day moving averages. That could signal near-term weakness, possibly due to interest rate uncertainty or regional banking concerns. However, for long-term investors, this might be an opportunity to pick up shares at a discount.
Risks and Considerations
No investment is risk-free, and dividend stocks are no exception. Here are some things to consider before jumping in:
⚠ Interest Rate Sensitivity – As a bank, PEBO’s profits depend on interest rates. A lower-rate environment could squeeze margins.
⚠ Earnings Decline – While revenue is up, net income has dropped, which could impact future dividend growth.
⚠ Stock Volatility – With a beta of 0.74, the stock is less volatile than the overall market but has been trending downward.
⚠ Regional Exposure – Since PEBO is a regional bank, it’s more vulnerable to local economic downturns.
One of the biggest unknowns is how the broader economic environment will affect the banking sector. If loan demand weakens or credit losses rise, that could weigh on profitability. However, the company’s history of conservative management provides some reassurance.
Final Thoughts
For dividend investors looking for a high-yield stock with solid fundamentals, Peoples Bancorp presents an interesting opportunity. The 5.46% yield is well-supported, and the payout ratio remains reasonable, giving it room to grow.
The biggest concern right now is the drop in quarterly earnings, which could put pressure on future dividend hikes. That said, the company’s strong revenue growth and solid balance sheet suggest that it’s in a good position to weather short-term challenges.
For those seeking a mix of income and stability, PEBO is worth considering. It may not be the fastest-growing dividend stock, but for steady, reliable payouts, it checks a lot of boxes.
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