For Immediate Release
Chicago, IL – March 2, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: MVB Financial Corp. MVBF, Popular, Inc. BPOP, WesBanco, Inc. WSBC and Northrim BanCorp, Inc. NRIM.
Here are highlights from Tuesday’s Analyst Blog:
4 Banks to Keep an Eye On to Earn Higher Dividend Income
At present, markets are extremely volatile, mainly on the Russia-Ukraine conflict, and investors are unsure which stocks to invest in to keep getting steady returns. At this point, dividend-paying stocks usually turn out to be attractive ones as these are a steady source of income.
Banks continue to be in the spotlight on the Federal Reserve's indication of raising interest rates this year amid raging inflation and a tighter job market. This, along with solid economic growth and a rise in loan demand, make bank stocks an investor favorite.
Investors who are always on the lookout for companies with a track record of consistent and incremental dividend payments can bet their money on banks like MVB Financial Corp., Popular, Inc., WesBanco, Inc. and Northrim BanCorp, Inc. as these have announced dividend hikes in the recent days.
These banks have been increasing quarterly dividends on a regular basis, thus enhancing shareholder value. Also, over the past year, these stocks have recorded decent price performance.
Let's dig deeper into these banks' financial performance and fundamentals, which will help understand the risks and rewards to earn higher dividend income.
MVB Financial: This February, MVB Financial announced the fifth consecutive quarterly hike of its dividend. The new dividend of 17 cents per share represents an increase of 13.3% from the previous payout. The dividend will be paid out on Mar 15 to shareholders on record as of Mar 1, 2022.
Prior to this, MVBF had hiked its dividend by 7%, 16.7%, 20% and 11.1% in the last four trailing quarters, respectively. Based on the last day's closing price of $38.52, the dividend yield currently stands at 1.77%.
The regular dividend hikes reflect MVB Financial's commitment to boosting shareholder value through its strong cash-generation capabilities. As of Dec 31, 2021, the company had $307.4 million in cash and cash equivalents, while subordinated debt balance was $73 million.
The year 2021 marked the successful completion of MVB 3.0 – a three-year strategic plan – under which the company exceeded its performance targets. Now, the company is looking forward to implementing its new three-year plan – MVB F1 – the details of which are expected to be disclosed later this month.
This Zacks Rank #3 (Hold) company is also expanding through strategic acquisitions. Last year, it acquired the majority interest in Trabian Technology, Inc, while in 2020, MVBF acquired Paladin L.L.C., as well as deposits and certain assets of First State Bank. These, along with past deals, are likely to continue aiding the company's financials.
Over the past month, the Zacks Consensus Estimate for MVB Financial's current-year earnings has been unchanged at $1.29 per share.
Popular: Last week, Popular announced the fourth consecutive annual dividend hike. The company declared a quarterly cash dividend of 55 cents per share, reflecting a rise of 25% from the prior payout. The dividend will be paid out on Apr 1 to shareholders on record as of Mar 15.
Prior to this, Popular hiked its dividend by 12.5% to 45 cents per share in May 2021. Considering the last day's closing price of $91.85, its dividend yield currently stands at 2.40%. Also, the yield is impressive compared with the industry average of 1.78%.
Apart from regular dividend payouts, BPOP has a share repurchase program in place. This January, the Zacks Rank #1 (Strong Buy) bank announced a $500 worth buyback authorization for 2022.
You can see the complete list of today's Zacks #1 Rank stocks here.
Popular also boasts a solid balance sheet. As of Dec 31, 2021, it had total debt worth $1.06 billion and cash and cash equivalents of $428.4 million. Of the total debt, only $0.8 million is short-term in nature. Given a robust liquidity position and decent earnings strength, the company's capital deployment activities seem sustainable.
Also, BPOP's operations are likely to lend support. The company's revenues recorded a CAGR of 7.9% over the last five years (ended 2021). Further, it evaluates its branch network and realigns business per customer needs.
Over the past 30 days, the Zacks Consensus Estimate for Popular's 2022 earnings has moved 12.7% upward to $9.42 per share.
WesBanco: Since 2010, WesBanco has hiked its dividend for the 15th time now. This represents a cumulative increase of 143% over the period and reflects a strong capital position.
Last week, this Zacks Rank #3 bank announced a 3% increase to its quarterly dividend to 34 cents per share. The dividend will be paid out on Apr 1 to its shareholders on record as of Mar 11, 2022.
This represents a dividend yield of 3.72% based on the last day's closing price of $36.54, which is quite impressive compared with the industry's yield of 1.78%. Prior to this, the company hiked its quarterly cash dividend in February 2021 by 3.1%.
Concurrently, WSBC had authorized extension of the stock repurchase program of up to additional 3.2 million shares. The buyback plan, originally announced in August 2021, has nearly 0.2 million shares remaining under the authorization. The program does not have an expiration date.
WesBanco has a history of successful acquisitions, which support its financials. The company's buyouts were in existing markets and new higher-growth metro areas. Solid capital and liquidity position keep aiding its efforts to focus on "appropriate capital management to enhance shareholder value."
The Zacks Consensus Estimate for WesBanco's current-year earnings has remained unchanged at $2.51 per share over the past 30 days.
Northrim: This Zacks Rank #3 bank has been raising dividends since 2010 annually. The latest dividend of 41 cents per share represented an increase of 7.9% from its prior payout. The dividend will be paid on Mar 18 to shareholders of record on Mar 10, 2022. Prior to this, NRIM hiked its dividend in August 2021 by 2.7% to 38 cents.
Based on the increased rate, the annual dividend comes to $1.64 per share, resulting in an annualized dividend yield of 3.66%, considering the last day's closing price of $44.79. The yield is impressive compared with the industry average of 2.03%.
Apart from regular dividend payouts, NRIM has a share repurchase plan in place. This January, an expansion of its share repurchase program was approved, under which the company is authorized to repurchase up to $13 million worth of shares. Since the inception of the stock repurchase plan, the bank has repurchased approximately 1.75 million shares.
These efforts reflect Northrim's commitment to boosting shareholder value through its strong cash-generation capabilities while retaining sufficient capital for growing organically. The company has been opening branches to further expand its market share in Alaska. The company's revenues witnessed a five-year (2017-2021) CAGR of 7.9% on the back of decent loan demand and focus on fee income.
Over the past month, the Zacks Consensus Estimate for Northrim's current-year earnings has been unchanged at $3.66 per share.
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