Western Alliance Bancorporation (NYSE:WAL) Has Announced A Dividend Of $0.36
Western Alliance Bancorporation (NYSE:WAL) will pay a dividend of $0.36 on the 25th of August. Based on this payment, the dividend yield will be 2.7%, which is fairly typical for the industry.
While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Western Alliance Bancorporation's stock price has increased by 94% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.
View our latest analysis for Western Alliance Bancorporation
Western Alliance Bancorporation's Earnings Will Easily Cover The Distributions
We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.
Western Alliance Bancorporation has a short history of paying out dividends, with its current track record at only 4 years. While it has a shorter history of paying out dividends, Western Alliance Bancorporation's payout ratio of 17% is a great sign for current shareholders, as this means that earnings greatly cover dividends.
Over the next 3 years, EPS is forecast to expand by 14.3%. The future payout ratio could be 16% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Western Alliance Bancorporation Is Still Building Its Track Record
Looking back, the dividend has been stable, but the company hasn't been paying a dividend for very long so we can't be confident that the dividend will remain stable through all economic environments. The dividend has gone from an annual total of $1.00 in 2019 to the most recent total annual payment of $1.44. This means that it has been growing its distributions at 9.5% per annum over that time. Western Alliance Bancorporation has a nice track record of dividend growth but we would wait until we see a longer track record before getting too confident.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Western Alliance Bancorporation has been growing its earnings per share at 18% a year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Western Alliance Bancorporation's prospects of growing its dividend payments in the future.
We Really Like Western Alliance Bancorporation's Dividend
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. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. 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 Western Alliance Bancorporation you should be aware of, and 1 of them is a bit unpleasant. 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.
