Hancock Whitney's (NASDAQ:HWC) Dividend Will Be Increased To $0.30

The board of Hancock Whitney Corporation (NASDAQ:HWC) has announced that it will be paying its dividend of $0.30 on the 15th of June, an increased payment from last year's comparable dividend. This takes the annual payment to 3.3% of the current stock price, which is about average for the industry.

View our latest analysis for Hancock Whitney

Hancock Whitney's Dividend Forecasted To Be Well Covered By Earnings

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important.

Hancock Whitney has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Using data from its latest earnings report, Hancock Whitney's payout ratio sits at 18%, an extremely comfortable number that shows that it can pay its dividend.

EPS is set to fall by 6.3% over the next 12 months. But assuming the dividend continues along recent trends, we believe the future payout ratio could be 21%, which we are pretty comfortable with and we think would be feasible on an earnings basis.

Hancock Whitney Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. The dividend has gone from an annual total of $0.96 in 2013 to the most recent total annual payment of $1.20. This means that it has been growing its distributions at 2.3% per annum over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.

The Dividend Looks Likely To Grow

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. We are encouraged to see that Hancock Whitney has grown earnings per share at 17% per year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Hancock Whitney Looks Like A Great Dividend Stock

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for Hancock Whitney that you should be aware of before investing. Is Hancock Whitney not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.