U.S. markets closed
  • S&P 500

    3,585.62
    -54.85 (-1.51%)
     
  • Dow 30

    28,725.51
    -500.10 (-1.71%)
     
  • Nasdaq

    10,575.62
    -161.89 (-1.51%)
     
  • Russell 2000

    1,664.72
    -10.21 (-0.61%)
     
  • Crude Oil

    79.74
    -1.49 (-1.83%)
     
  • Gold

    1,668.30
    -0.30 (-0.02%)
     
  • Silver

    19.01
    +0.30 (+1.62%)
     
  • EUR/USD

    0.9801
    -0.0018 (-0.19%)
     
  • 10-Yr Bond

    3.8040
    +0.0570 (+1.52%)
     
  • GBP/USD

    1.1166
    +0.0043 (+0.38%)
     
  • USD/JPY

    144.7290
    +0.2860 (+0.20%)
     
  • BTC-USD

    19,365.74
    -88.83 (-0.46%)
     
  • CMC Crypto 200

    443.49
    +0.06 (+0.01%)
     
  • FTSE 100

    6,893.81
    +12.22 (+0.18%)
     
  • Nikkei 225

    25,937.21
    -484.84 (-1.83%)
     

Huntington Bancshares (NASDAQ:HBAN) Is Due To Pay A Dividend Of US$0.155

·3 min read

Huntington Bancshares Incorporated ( NASDAQ:HBAN ) has announced that it will pay a dividend of US$0.155 per share on the 1st of April. Based on this payment, the dividend yield on the company's stock will be 4.1%, which is an attractive boost to shareholder returns.

See our latest analysis for Huntington Bancshares

Huntington Bancshares' Payment Has Solid Earnings Coverage

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. The last dividend was quite easily covered by Huntington Bancshares' earnings. This indicates that quite a large proportion of earnings is being invested back into the business.

Over the next year, EPS is forecast to expand by 46.0%. Assuming the dividend continues along recent trends, we think the payout ratio could be 61% by next year, which is in a pretty sustainable range.

historic-dividend
historic-dividend

Huntington Bancshares Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2012, the first annual payment was US$0.04, compared to the most recent full-year payment of US$0.62. This works out to be a compound annual growth rate (CAGR) of approximately 32% a year over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.

Huntington Bancshares May Find It Hard To Grow The Dividend

The company's investors will be pleased to have been receiving dividend income for some time. However, Huntington Bancshares has only grown its earnings per share at 2.3% per annum over the past five years. Huntington Bancshares is struggling to find viable investments, so it is returning more to shareholders. This isn't bad in itself, but unless earnings growth pick up we wouldn't expect dividends to grow either.

We'd also point out that Huntington Bancshares has issued stock equal to 41% of shares outstanding. Regularly doing this can be detrimental - it's hard to grow dividends per share when new shares are regularly being created.

Huntington Bancshares Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 2 warning signs for Huntington Bancshares that investors should take into consideration. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.