Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Hancock Whitney Corporation (NASDAQ:HWC) is about to trade ex-dividend in the next 4 days. Ex-dividend means that investors that purchase the stock on or after the 4th of March will not receive this dividend, which will be paid on the 16th of March.
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. Looking at the last 12 months of distributions, Hancock Whitney has a trailing yield of approximately 3.1% on its current stock price of $34.96. If you buy this business for its dividend, you should have an idea of whether Hancock Whitney's dividend is reliable and sustainable. As a result, readers should always check whether Hancock Whitney has been able to grow its dividends, or if the dividend might be cut.
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. That's why it's good to see Hancock Whitney paying out a modest 29% of its earnings.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. Fortunately for readers, Hancock Whitney's earnings per share have been growing at 12% a year for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, ten years ago, Hancock Whitney has lifted its dividend by approximately 1.2% a year on average. Earnings per share have been growing much quicker than dividends, potentially because Hancock Whitney is keeping back more of its profits to grow the business.
Is Hancock Whitney an attractive dividend stock, or better left on the shelf? Companies like Hancock Whitney that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. In summary, Hancock Whitney appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.
Ever wonder what the future holds for Hancock Whitney? See what the nine analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow
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.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.