United Bankshares' (NASDAQ:UBSI) Dividend Will Be $0.37

United Bankshares, Inc. (NASDAQ:UBSI) has announced that it will pay a dividend of $0.37 per share on the 1st of April. Based on this payment, the dividend yield on the company's stock will be 4.1%, which is an attractive boost to shareholder returns.

View our latest analysis for United Bankshares

United Bankshares' Dividend Forecasted To Be Well Covered By Earnings

A big dividend yield for a few years doesn't mean much if it can't be sustained.

United Bankshares has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on United Bankshares' last earnings report, the payout ratio is at a decent 54%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next 3 years, EPS is forecast to expand by 17.7%. Analysts forecast the future payout ratio could be 50% over the same time horizon, which is a number we think the company can maintain.

United Bankshares Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was $1.28, compared to the most recent full-year payment of $1.48. This works out to be a compound annual growth rate (CAGR) of approximately 1.5% 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.

Dividend Growth May Be Hard To Achieve

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. United Bankshares hasn't seen much change in its earnings per share over the last five years. Growth of 1.6% may indicate that the company has limited investment opportunity so it is returning its earnings to shareholders instead. This could mean the dividend doesn't have the growth potential we look for going into the future.

We Really Like United Bankshares' Dividend

Overall, we like to see the dividend staying consistent, and we think United Bankshares might even raise payments in the future. Earnings are easily covering distributions, and the company is generating plenty of cash. 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. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 5 United Bankshares analysts we track are forecasting continued growth with our free report on analyst estimates for the company. 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.