Popular Stock Touches 52-Week High: Should You Consider Investing?

Shares of Popular, Inc. BPOP touched a new 52-week high of $128.89 in yesterday's trading session. However, the stock closed the session a little lower at $126.98.

Over the past six months, BPOP shares have risen 36.8%, outperforming the industry’s growth of 11.2%. Further, the company performed far better than its close peers, Pinnacle Financial Partners PNFP and Synovus Financial SNV, during the same time frame.

Price Performance

Popular’s recent price rally reflects optimism surrounding the Federal Reserve’s latest interest rate cut and expectations of additional reductions by year's end. The lower interest rates typically encourage loan demand and reduce funding costs, which directly support banks like BPOP.

Over the past four years (ended 2024), the company’s net interest income (NII) grew at a compound annual growth rate (CAGR) of 5.3%. Further, its net interest margin (NIM) improved steadily to 3.24% in 2024 from 2.88% in 2021. Both NII and NIM continued to improve year over year in the first half of 2025. Looking ahead, management anticipates further growth in NII and NIM, supported by the repricing of its investment portfolio. With the Federal Reserve expected to continue cutting rates, the company is well-positioned to benefit from stronger loan activity and additional improvements in NII and NIM in the coming period.

Other Factors Fueling Popular’s Growth

Organic Growth Strategy: The company has maintained its focus on strengthening its core operations through an organic growth strategy. Over the past four years that ended in 2024, the company’s revenues recorded a CAGR of 5.6%, with the upward momentum continuing in the first half of 2025. Net loans expanded at a CAGR of 6.8% over the same period, while deposits registered a CAGR of 3.4%. Both loan and deposit balances rose year over year in the first half of 2025. With a solid loan pipeline and growing deposit base, Popular is well-positioned to sustain healthy organic growth in the upcoming period.

Digital Transformation and Efficiency Initiatives: In 2022, BPOP launched a multi-year transformation initiative to meet evolving client expectations and reinforce its competitive edge. The program centers on upgrading technology infrastructure and adopting agile practices to enhance customer experience, streamline internal processes and drive operational efficiency.

To accelerate its digital strategy, the company acquired key customer channels from Evertec in 2022. Building on this momentum, in 2023, the company committed $300 million toward technology investments aimed at creating reliable, secure, and innovative banking platforms. These efforts are designed not only to improve customer satisfaction but also to position the bank for long-term profitability.

Through such efforts, the company aims to achieve a 14% return on tangible common equity by the end of 2025.

Solid Liquidity Profile: The company enjoys a robust liquidity position. As of June 30, 2025, the company’s liquidity totaled $6.8 billion, while its total debt, comprising both short-term borrowings and long-term obligations, stood at $1.4 billion.

Popular has consistently rewarded its shareholders through dividends and share buybacks. In August 2025, the company raised its quarterly dividend by 7.1% to 75 cents per share. Currently, the dividend yield of the company stands at 2.36%. Further, the dividend yield of its peers, Pinnacle Financial and Synovus Financial, are 1.01% and 3.12%, respectively.

Dividend Yield

Additionally, BPOP has a share repurchase plan. In August 2024, the company announced a $500 million share repurchase authorization. As of June 30, 2025, $32.8 million remained available under this authorization. Further, in July 2025, the company launched a new buyback program, in addition to the $500 million authorized in 2024. Given the favorable payout ratio and solid liquidity, such capital distribution activities seem sustainable.

Final Thoughts on Popular Stock

The company continues to benefit from steady loan and deposit growth, improving margins, and ongoing digital transformation initiatives that enhance customer experience and operational efficiency. Its strong liquidity also provides room for continued shareholder-friendly actions, including dividend hikes and buybacks.

In terms of valuation, BPOP stock appears inexpensive relative to the industry. The company is currently trading at a 12-month trailing price-to-earnings (P/E) ratio of 10.27X, which is lower than the industry’s 10.86X.

Price-to-Earnings F12 M

Notably, Pinnacle Financial holds a P/E ratio of 11.21X, while Synovus Financial’s P/E ratio stands at 9.02X.

Thus, considering its attractive valuation, solid fundamentals, and stable earnings outlook, Popular stands out as a compelling pick for investors.

BPOP 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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