Huntington Bancshares Inc's Dividend Analysis
Assessing the Sustainability of Huntington Bancshares Inc's Upcoming Dividend
Huntington Bancshares Inc (NASDAQ:HBAN) recently announced a dividend of $0.16 per share, payable on 2024-04-01, with the ex-dividend date set for 2024-03-15. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Huntington Bancshares Inc's dividend performance and assess its sustainability.
What Does Huntington Bancshares Inc Do?
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Huntington Bancshares Inc is a regional bank holding company headquartered in Columbus, Ohio. The bank operates in two business segments: Consumer & Regional Banking and Commercial Banking. The bank derives the maximum of its revenue from the Consumer & Business Banking segment. The other segment of the bank consists of Treasury and others. The bank also provides auto dealer, equipment finance, investment management, trust, brokerage, capital market services, and other services.
A Glimpse at Huntington Bancshares Inc's Dividend History
Huntington Bancshares Inc has maintained a consistent dividend payment record since 1984. Dividends are currently distributed on a quarterly basis. Huntington Bancshares Inc has increased its dividend each year since 2009. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 15 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Huntington Bancshares Inc's Dividend Yield and Growth
As of today, Huntington Bancshares Inc currently has a 12-month trailing dividend yield of 4.80% and a 12-month forward dividend yield of 4.80%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Huntington Bancshares Inc's annual dividend growth rate was 1.10%. Extended to a five-year horizon, this rate increased to 3.70% per year. And over the past decade, Huntington Bancshares Inc's annual dividends per share growth rate stands at an impressive 14.50%.
Based on Huntington Bancshares Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Huntington Bancshares Inc stock as of today is approximately 5.76%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Huntington Bancshares Inc's dividend payout ratio is 0.50.
Huntington Bancshares Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Huntington Bancshares Inc's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Huntington Bancshares Inc's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Huntington Bancshares Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Huntington Bancshares Inc's revenue has increased by approximately 2.40% per year on average, a rate that underperforms than approximately 73.49% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Huntington Bancshares Inc's earnings increased by approximately 21.60% per year on average, a rate that underperforms than approximately 31.17% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 2.40%, which underperforms than approximately 70.56% of global competitors.
Next Steps
In conclusion, Huntington Bancshares Inc's upcoming dividend, consistent dividend growth rate, manageable payout ratio, and fair profitability and growth metrics paint a picture of a company committed to returning value to its shareholders. While its growth rates in revenue, earnings, and EBITDA may not be leading the pack, they've been sufficient to support the company's dividend ambitions. Investors looking for steady income streams may find Huntington Bancshares Inc an attractive option, but as with any investment, it's crucial to consider the broader economic context and individual financial goals. Will Huntington Bancshares Inc continue to be a reliable dividend payer in the years to come? That remains a question for value investors to ponder as they analyze the bank's performance and sector trends.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
