M&T Bank (MTB) Rewards Shareholders With 10% Dividend Hike

As part of its 2019 capital plan (approved by the Federal Reserve), M&T Bank Corporation’s MTB board of directors has announced a 10% hike in the company’s quarterly common stock dividend. The revised quarterly dividend now comes in at $1.10 per share compared with the previous figure of $1.00. This dividend will be paid on Dec 31, to shareholders of record as of Dec 2, 2019.

Since the 2008 financial crisis, M&T Bank has raised its dividend four times. From paying 70 cents a share as quarterly dividend during the financial crisis, the company has come a long way in displaying its capital strength. Prior to this hike, it had raised its dividend by 25% (from 80 cents to $1.00 per share) in August 2018.

Considering Tuesday’s closing price of $162.88 per share, the dividend yield is currently valued at 2.7%.

Alongside, the company has an impressive share-repurchase plan. Its 2019 capital plan includes share buyback of up to $1.9 billion, over the four-quarter period, effective July 2019.

Investors interested in this Zacks Rank #3 (Hold) stock can have a look at the bank’s fundamentals and growth opportunities. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Revenue Growth: M&T Bank continues to make steady progress toward bolstering its revenues. Since 2008, the company has recorded a continued rise in net interest income. Over the last five years (ended 2018), it has witnessed a compound annual growth rate (CAGR) of nearly 11%, with the trend continuing in the first nine months of 2019.

The company’s projected sales growth (F1/F0) of 3.97% (compared with the industry average of 1.56%) indicates constant upward momentum in revenues.

Earnings Per Share Strength: Earnings are anticipated to display an upswing in the near term, as the company’s projected EPS growth (F1/F0) is 6.14% compared with the industry average rate of 4.75%. Also, M&T Bank has an estimated EPS (3-5 years) growth rate of 9%.

Inorganic Growth Routes: Given its robust liquidity position, M&T Bank is well poised to grow on the back of acquisitions. The company’s accomplishment of several major acquisitions in and out of the United States in the last several years reflects this growth. Further, product and balance-sheet diversification, resulting from these acquisitions, will likely support the company’s top line.

Strong Leverage: M&T Bank’s debt/equity ratio is valued at 0.48 compared with the industry average of 0.91, indicating a relatively lower debt burden. It highlights the company’s financial stability amid adverse economic environment.

Superior Return on Equity (ROE): M&T Bank’s ROE of 13.82%, as compared with the industry average of 12.15%, underlines the company’s commendable position over its peers.

Impressive Price Performance: Shares of M&T Bank have jumped 13.8% so far, this year, compared with the 29.3% gain of the industry.

Some other finance stocks which raised their dividends during the past three months include Bank OZK OZK, Eaton Vance Corp. EV and Glacier Bancorp, Inc. GBCI.  Bank OZK raised its quarterly dividend by 4.17%, while Eaton Vance increased by 7.1%. Glacier Bancorp has also announced a 7.41% rise in its common stock dividend.

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M&T Bank Corporation (MTB) : Free Stock Analysis Report
 
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