Yahoo Finance Huntington Bancshares' (NASDAQ:HBAN) Dividend Will Be $0.155
Huntington Bancshares Incorporated's (NASDAQ:HBAN) investors are due to receive a payment of $0.155 per share on 1st of July. This means the annual payment is 4.5% of the current stock price, which is above the average for the industry.
Check out our latest analysis for Huntington Bancshares
Huntington Bancshares' Dividend Forecasted To Be Well Covered By Earnings
While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.
Huntington Bancshares has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Huntington Bancshares' last earnings report, the payout ratio is at a decent 55%, meaning that the company is able to pay out its dividend with a bit of room to spare.
Over the next 3 years, EPS is forecast to expand by 41.1%. Analysts estimate the future payout ratio will be 46% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.
Huntington Bancshares Has A Solid Track Record
The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.20 in 2014, and the most recent fiscal year payment was $0.62. This works out to be a compound annual growth rate (CAGR) of approximately 12% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.
The Dividend's Growth Prospects Are Limited
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Let's not jump to conclusions as things might not be as good as they appear on the surface. Huntington Bancshares has seen earnings per share falling at 2.2% per year over the last five years. If the company is making less over time, it naturally follows that it will also have to pay out less in dividends. Earnings are predicted to grow over the next year, but we would remain cautious until a track record of earnings growth is established.
Our Thoughts On Huntington Bancshares' Dividend
In summary, we are pleased with the dividend remaining consistent, and we think there is a good chance of this continuing in the future. While the payments look sustainable for now, earnings have been shrinking so the dividend could come under pressure in the future. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Huntington Bancshares that investors need to be conscious of moving forward. Is Huntington Bancshares not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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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.
