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 September. Even though the dividend went up, the yield is still quite low at only 2.8%.

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. Investors will be pleased to see that Hancock Whitney's stock price has increased by 35% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield.

See our latest analysis for Hancock Whitney

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

Even a low dividend yield can be attractive if it is sustained for years on end.

Hancock Whitney has a long history of paying out dividends, with its current track record at a minimum of 10 years. Using data from its latest earnings report, Hancock Whitney's payout ratio sits at 19%, an extremely comfortable number that shows that it can pay its dividend.

Looking forward, earnings per share is forecast to fall by 15.9% 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 24%, which would be comfortable for the company to continue in the future.

Hancock Whitney Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the annual payment back then was $0.96, compared to the most recent full-year payment of $1.20. This works out to be a compound annual growth rate (CAGR) of approximately 2.3% a year over that time. Slow and steady dividend growth might not sound that exciting, but dividends have been stable for ten years, which we think makes this a fairly attractive offer.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Hancock Whitney has grown earnings per share at 15% 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.

We Really Like Hancock Whitney's Dividend

In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The distributions are easily covered by earnings, and there is plenty of cash being generated as well. We should point out that the earnings are expected to fall over the next 12 months, which won't be a problem if this doesn't become a trend, but could cause some turbulence in the next year. 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. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've identified 2 warning signs for Hancock Whitney (1 is significant!) that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield 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.