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The board of Hancock Whitney Corporation (NASDAQ:HWC) has announced that it will be paying its dividend of $0.30 on the 15th of September, an increased payment from last year's comparable dividend. This takes the annual payment to 2.7% of the current stock price, which is about average for the industry.
See our latest analysis for Hancock Whitney
Hancock Whitney's Dividend Forecasted To Be Well Covered By Earnings
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.
Hancock Whitney has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. While past data isn't a guarantee for the future, Hancock Whitney's latest earnings report puts its payout ratio at 19%, showing that the company can pay out its dividends comfortably.
Looking forward, earnings per share is forecast to fall by 15.9% over the next year. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 24%, which we are pretty comfortable with and we think would be feasible on an earnings basis.
Hancock Whitney Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the dividend has gone from $0.96 total annually to $1.20. This means that it has been growing its distributions at 2.3% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
The Dividend Looks Likely To Grow
Investors could be attracted to the stock based on the quality of its payment history. Hancock Whitney has seen EPS rising for the last five years, at 15% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Hancock Whitney's prospects of growing its dividend payments in the future.
Hancock Whitney Looks Like A Great Dividend Stock
Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. All in all, this checks a lot of the boxes we look for when choosing an income stock.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Just as an example, we've come across 2 warning signs for Hancock Whitney you should be aware of, and 1 of them makes us a bit uncomfortable. Is Hancock Whitney not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.