Yahoo Finance Is Hancock Whitney Corporation (NASDAQ:HWC) A Smart Pick For Income Investors?
Hancock Whitney Corporation (NASDAQ:HWC) has pleased shareholders over the past 10 years, by paying out dividends. The company currently pays out a dividend yield of 2.8% to shareholders, making it a relatively attractive dividend stock. Let’s dig deeper into whether Hancock Whitney should have a place in your portfolio.
Check out our latest analysis for Hancock Whitney
5 questions to ask before buying a dividend stock
Whenever I am looking at a potential dividend stock investment, I always check these five metrics:
Is its annual yield among the top 25% of dividend-paying companies?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has it increased its dividend per share amount over the past?
Can it afford to pay the current rate of dividends from its earnings?
Will it be able to continue to payout at the current rate in the future?
How well does Hancock Whitney fit our criteria?
Hancock Whitney has a trailing twelve-month payout ratio of 30%, meaning the dividend is sufficiently covered by earnings. However, going forward, analysts expect HWC’s payout to fall to 27% of its earnings, which leads to a dividend yield of 2.9%. However, EPS should increase to $4.06, meaning that the lower payout ratio does not necessarily implicate a lower dividend payment.
When thinking about whether a dividend is sustainable, another factor to consider is the cash flow. A business with strong cash flow can sustain a higher divided payout ratio than a company with weak cash flow.
If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. HWC has increased its DPS from $0.96 to $1.08 in the past 10 years. It has also been paying out dividend consistently during this time, as you’d expect for a company increasing its dividend levels. This is an impressive feat, which makes HWC a true dividend rockstar.
In terms of its peers, Hancock Whitney generates a yield of 2.8%, which is on the low-side for Banks stocks.
Next Steps:
Keeping in mind the dividend characteristics above, Hancock Whitney is definitely worth considering for investors looking to build a dedicated income portfolio. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three fundamental aspects you should look at:
Future Outlook: What are well-informed industry analysts predicting for HWC’s future growth? Take a look at our free research report of analyst consensus for HWC’s outlook.
Valuation: What is HWC worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether HWC is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
