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HBAN

Huntington Bancshares NasdaqGS:HBAN Stock Report

Last Price

US$13.95

Market Cap

US$19.4b

7D

8.5%

1Y

-13.0%

Updated

04 Oct, 2022

Data

Company Financials +
HBAN fundamental analysis
Snowflake Score
Valuation4/6
Future Growth1/6
Past Performance5/6
Financial Health6/6
Dividends5/6

HBAN Stock Overview

Huntington Bancshares Incorporated operates as the bank holding company for The Huntington National Bank that provides commercial, consumer, and mortgage banking services in the United States.

Huntington Bancshares Incorporated Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Huntington Bancshares
Historical stock prices
Current Share PriceUS$13.95
52 Week HighUS$17.79
52 Week LowUS$11.67
Beta1.19
1 Month Change4.73%
3 Month Change15.00%
1 Year Change-13.03%
3 Year Change3.37%
5 Year Change-0.22%
Change since IPO132.69%

Recent News & Updates

Sep 07

Huntington Bancshares Remains Too Good To Sell

Summary Huntington Bancshares is one of America's largest regional banks with a huge footprint in the Midwest. The company offers a very high dividend yield and a valuation well below fair value. I believe that HBAN has the ability to outperform its peers and the market thanks to its valuation, solid balance sheet, and improving post-merger business. Introduction There are thousands of ways to assess the quality of one's portfolio. Most of them are quantitative measures based on numbers and math. However, I also apply a simple measure based on coming up with reasons to sell investments in my portfolio. If I cannot come up with compelling reasons, I'm not selling a single share. Huntington Bancshares (HBAN) has been in my portfolio since 2020. I got in really cheap as part of a bigger project I was working on back then. The shares add quality high-yield to my portfolio. Yet, I am constantly looking to sell as I prefer stocks with higher growth and I have to say that regional banking stocks are so very boring. However, I haven't sold a single share under the HBAN ticker as the company is simply too good to sell. There are not a lot of good alternatives in that high-yield range (without going overweight energy) and if HBAN dividend growth picks up again, we're dealing with a company that is poised to deliver very satisfying long-term total returns. In this article, I will guide you through my thoughts and explain why HBAN shares will remain a core part of my portfolio. Also, I finally get to give my income-oriented investors a high-yield pick again after covering a lot of dividend growth stocks this year. So, let's get to it! Quality High-Yield Initially, Huntington Bancshares was my only financial holding. I bought the company in 2020 at $9.30. Back then, I was working with clients on trading opportunities given the severe stock market weakness back then. I decided to go a step further and make the company a core holding of my dividend portfolio back then. I really liked the high yield, which was needed given that I decided to mainly focus on dividend growth. Author Portfolio My current pre-tax portfolio dividend yield is 2.3%, which I am hoping to maintain. This means I will have to stick to high-yield companies as I continue to buy low-yield dividend growth stocks. Huntington Bancshares is a great way to add income to one's portfolio. This Columbus, Ohio-based regional bank was founded in 1866. With a market cap of $19.0 billion, the company is the 9th-largest regional bank in the United States The bank's main focus is on the Midwest, where it has a huge footprint in Ohio, Michigan, Minnesota, Pennsylvania, and India with branches in Illinois, Colorado, West Virginia, Wisconsin, and Kentucky. The single best thing about HBAN is its yield, which is backed by strong fundamentals. Currently, HBAN pays its investors $0.155 per share per quarter. That's $0.62 per year, which translates to a 4.7% yield. This yield is one of the highest of the past 10 years, excluding the pandemic sell-off in early 2020. Moreover, this yield is almost 160 basis points above the Vanguard High Yield Dividend ETF (VYM), and more than double the yield of the SPDR Regional Banking ETF (KRE). HBAN Dividend Yield data by YCharts If investors want a yield this high, there are opportunities in other areas. For example, a lot of energy companies have similar yields or at least the potential to get to HBAN's levels thanks to high energy prices. HBAN, however, brings a bit more to the table than just a decent yield. The table below displays the Seeking Alpha dividend scorecard for HBAN. Please note that all numbers are quantitative, meaning no subjective opinions are involved here. Also, the grades are relative to the financial sector. Seeking Alpha What we see is that the yield is indeed scoring high versus financial peers, and that's a good sign as financials, in general, tend to have high yields - think of major banks, regional banks, and related companies. Moreover, the company scores low on dividend growth. That's not entirely true as it depends a bit on what numbers are important. Short-term dividend growth is indeed quite bad as the company has just hiked once since the start of the pandemic. That hike was announced In October of 2021 when management hiked by 3.3%. HBAN Dividend data by YCharts The good news is that since the Great Financial Crisis, dividend growth has been anything but underwhelming. Over the past 10 years, the average annual dividend growth rate was 14.4%. The five-year average is a bit higher at 14.7%. In these categories, the company scores A-. With that said, I will also have to address the low score on dividend safety. After all, buying a high yield won't do any good if it doesn't come with decent safety. It's like buying a luxury car that is likely to crash at any given moment. The good news here is that while the company scores "low" on safety, it still has satisfying payout ratios, even if these ratios are above the peer median. Seeking Alpha It also helps that the yield comes with decent capital gains. HBAN's Long-Term Outperformance Going back to 2010, HBAN has returned 14.1% per year with a standard deviation of 27.9%. This is a better performance than the SPDR Regional Banking ETF, which returned 10.7% - it also comes with a lower yield. It also beats the S&P 500, but not on a volatility-adjusted basis (Sharpe/Sortino ratios). Portfolio Visualizer HBAN investors have been prone to a few steep drawdowns. 25% drawdowns are tough, but it's somewhat common. It has happened at least four times over the past 6 years. Including one sell-off of almost 60% when people thought the world was ending in early 2020. HBAN data by YCharts It also needs to be said that I was "cherry picking" (a little bit) when I showed you the outperformance chart above. Going back to the pre-Great Financial Crisis times, HBAN was unable to beat the market. Even worse, the stock has lost money as the 93% drawdown back then was just too much. Portfolio Visualizer The issue here is not that I expect a similar recession to happen anytime soon, but that regional banks, in general, come with high volatility, which hurts the long-term performance. That's why I will keep my exposure in HBAN limited, even though I'm not selling. I believe that the high yield makes the risk/reward fair for investors wanting to add more income to their portfolios. It also helps that HBAN is evolving and becoming more than just a "boring" regional bank. A Good Business, A Better Valuation For example, the TCF merger is going smoothly. The company closed the transaction in less than six months. Total cost savings of $1.0 billion were achieved in 2Q22, one quarter earlier than expected. Moreover, the ROTCE (return on tangible common equity) was 20.6% in 2Q22 with an adjusted efficiency ratio of 56%, which makes the bank one of the most efficient with strong earnings power. Huntington Bancshares 2Q22 Investor Presentation Organic growth was strong with total loan growth of 2.5% in 2Q22 (versus 1Q22). Excluding PPP loans, growth was 3.0%. Even more important than loan growth is financial stability. Total net charge-offs were 0.03%. NPAs declined to 59 basis points. Huntington Bancshares 2Q22 Investor Presentation HBAN isn't just doing well, it is even doing very well compared to its peers when it comes to loan quality. Huntington Bancshares 2Q22 Investor Presentation Moreover, the company has achieved all of its median-term financial goals. Total revenue growth above nominal GDP growth (5% in 2Q22 versus 1Q22). Return on tangible common equity of more than 17% (20.6% in 2Q22). Efficiency ratio of 56% - down from 62.0% in 2Q21. A CET1 ratio between 9-10%. The company is also doing quite well when it comes to integrating Capstone Partners. This deal was closed on June 15 and it adds more investment banking exposure to HBAN's portfolio. Capstone is a middle market investment bank and advisory firm with knowledge of 12 industry groups. Headquartered in both Boston and Denver, this company has more than 175 employees across 12 offices. This deal could increase HBAN's capital market fees from $168 million (annualized as of 1Q22) to more than $260 million. This deal adds roughly 10 thousand mid-market clients who have so far benefited from Capstone services as well as expertise in aerospace & defense, energy, and FinTech, which is a big deal for HBAN as it is looking to become way more efficient and leaner. Unfortunately, despite all the good news, the company has not outperformed its peers year-to-date (excluding dividends). KRE data by YCharts This does by no means indicate that HBAN's investments aren't paying off. It does show that regional banks are slow-moving vehicles. They are truly snails who do go in the right direction, but very slowly. After all, the single biggest influence of regional bank charts is the macro environment. Hence, I do believe that HBAN will continue to outperform its peers. But it's not going to be noticeable when looking at short-term intervals like the YTD chart above.

Aug 24
Huntington Bancshares (NASDAQ:HBAN) Will Pay A Dividend Of $0.155

Huntington Bancshares (NASDAQ:HBAN) Will Pay A Dividend Of $0.155

The board of Huntington Bancshares Incorporated ( NASDAQ:HBAN ) has announced that it will pay a dividend on the 3rd of...

Aug 09
Huntington Bancshares (NASDAQ:HBAN) Is Due To Pay A Dividend Of $0.155

Huntington Bancshares (NASDAQ:HBAN) Is Due To Pay A Dividend Of $0.155

Huntington Bancshares Incorporated's ( NASDAQ:HBAN ) investors are due to receive a payment of $0.155 per share on 3rd...

Shareholder Returns

HBANUS BanksUS Market
7D8.5%1.1%1.0%
1Y-13.0%-24.1%-20.0%

Return vs Industry: HBAN exceeded the US Banks industry which returned -24.1% over the past year.

Return vs Market: HBAN exceeded the US Market which returned -20% over the past year.

Price Volatility

Is HBAN's price volatile compared to industry and market?
HBAN volatility
HBAN Average Weekly Movement4.3%
Banks Industry Average Movement3.4%
Market Average Movement6.8%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

Stable Share Price: HBAN is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: HBAN's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
186619,866Steve Steinourhttps://www.huntington.com

Huntington Bancshares Incorporated operates as the bank holding company for The Huntington National Bank that provides commercial, consumer, and mortgage banking services in the United States. The company operates through four segments: Consumer and Business Banking; Commercial Banking; Vehicle Finance; and Regional Banking and The Huntington Private Client Group (RBHPCG). The Consumer and Business Banking segment offers financial products and services, such as checking accounts, savings accounts, money market accounts, certificates of deposit, credit cards, and consumer and small business loans, as well as investment products.

Huntington Bancshares Incorporated Fundamentals Summary

How do Huntington Bancshares's earnings and revenue compare to its market cap?
HBAN fundamental statistics
Market CapUS$19.43b
Earnings (TTM)US$1.65b
Revenue (TTM)US$6.76b

12.2x

P/E Ratio

1.3x

P/B Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
HBAN income statement (TTM)
RevenueUS$6.76b
Cost of RevenueUS$0
Gross ProfitUS$6.76b
Other ExpensesUS$5.11b
EarningsUS$1.65b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

Oct 21, 2022

Earnings per share (EPS)1.15
Gross Margin100.00%
Net Profit Margin24.45%
Debt/Equity Ratio64.5%

How did HBAN perform over the long term?

See historical performance and comparison

Dividends

4.4%

Current Dividend Yield

54%

Payout Ratio