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

Hancock Whitney Corporation's (NASDAQ:HWC) dividend will be increasing from last year's payment of the same period to $0.30 on 15th of June. This takes the annual payment to 3.6% of the current stock price, which is about average for the industry.

While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Hancock Whitney's stock price has reduced by 37% in the last 3 months, which is not ideal for investors and can explain a sharp increase in the dividend yield.

View our latest analysis for Hancock Whitney

Hancock Whitney's Payment Expected To Have Solid Earnings Coverage

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.

Looking forward, earnings per share is forecast to fall by 6.3% over the next year. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 21%, which would be comfortable for the company to continue in the future.

Hancock Whitney Has A Solid Track Record

The company has an extended history of paying stable dividends. The annual payment during the last 10 years was $0.96 in 2013, and the most recent fiscal year payment was $1.20. This implies that the company grew its distributions at a yearly rate of about 2.3% over that duration. 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

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Hancock Whitney has impressed us by growing EPS at 17% per year over the past five years. Hancock Whitney definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

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. However, it is worth noting that the earnings are expected to fall over the next year, which may not change the long term outlook, but could affect the dividend payment in the next 12 months. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. As an example, we've identified 1 warning sign for Hancock Whitney that you should be aware of before investing. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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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.