It looks like Hancock Whitney Corporation (NASDAQ:HWC) is about to go ex-dividend in the next three days. Ex-dividend means that investors that purchase the stock on or after the 4th of September will not receive this dividend, which will be paid on the 15th of September.
Hancock Whitney's next dividend payment will be US$0.27 per share. Last year, in total, the company distributed US$1.08 to shareholders. Based on the last year's worth of payments, Hancock Whitney stock has a trailing yield of around 5.3% on the current share price of $20.39. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Hancock Whitney can afford its dividend, and if the dividend could grow.
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Hancock Whitney reported a loss last year, so it's not great to see that it has continued paying a dividend.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Hancock Whitney reported a loss last year, but at least the general trend suggests its income has been improving over the past five years. Even so, an unprofitable company whose business does not quickly recover is usually not a good candidate for dividend investors.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, Hancock Whitney has increased its dividend at approximately 1.2% a year on average.
We update our analysis on Hancock Whitney every 24 hours, so you can always get the latest insights on its financial health, here.
To Sum It Up
Is Hancock Whitney an attractive dividend stock, or better left on the shelf? We're uncomfortable with the fact that Hancock Whitney paid a dividend while being loss-making. This is not an overtly appealing combination of characteristics, and we're just not that interested in this company's dividend.
So if you're still interested in Hancock Whitney despite it's poor dividend qualities, you should be well informed on some of the risks facing this stock. Every company has risks, and we've spotted 3 warning signs for Hancock Whitney you should know about.
If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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