Wintrust Financial's (NASDAQ:WTFC) Shareholders Will Receive A Bigger Dividend Than Last Year
Wintrust Financial Corporation (NASDAQ:WTFC) will increase its dividend from last year's comparable payment on the 24th of August to $0.40. Despite this raise, the dividend yield of 1.9% is only a modest boost to shareholder returns.
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 Wintrust Financial's stock price has increased by 30% 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 Wintrust Financial
Wintrust Financial's Earnings Will Easily Cover The Distributions
Even a low dividend yield can be attractive if it is sustained for years on end.
Wintrust Financial has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. While past data isn't a guarantee for the future, Wintrust Financial's latest earnings report puts its payout ratio at 15%, showing that the company can pay out its dividends comfortably.
Looking forward, earnings per share is forecast to fall by 4.4% over the next 3 years. Despite that, analysts estimate the future payout ratio could be 18% over the same time period, which is in a pretty comfortable range.
Wintrust Financial Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of $0.18 in 2013 to the most recent total annual payment of $1.60. This implies that the company grew its distributions at a yearly rate of about 24% over that duration. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. Wintrust Financial has impressed us by growing EPS at 13% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
Wintrust Financial Looks Like A Great Dividend Stock
Overall, a dividend increase is always good, and we think that Wintrust Financial is a strong income stock thanks to its track record and growing earnings. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All in all, this checks a lot of the boxes we look for when choosing an income stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for Wintrust Financial that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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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.
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