United Bankshares (NASDAQ:UBSI) Has Affirmed Its Dividend Of $0.36

United Bankshares, Inc. (NASDAQ:UBSI) will pay a dividend of $0.36 on the 2nd of October. This makes the dividend yield 4.8%, which will augment investor returns quite nicely.

View our latest analysis for United Bankshares

United Bankshares' Dividend Forecasted To Be Well Covered By Earnings

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained.

United Bankshares has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on United Bankshares' last earnings report, the payout ratio is at a decent 49%, meaning that the company is able to pay out its dividend with a bit of room to spare.

EPS is set to fall by 10.6% over the next 12 months. But if the dividend continues along the path it has been on recently, we estimate the future payout ratio could be 56%, which would be comfortable for the company to continue in the future.

United Bankshares Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the annual payment back then was $1.24, compared to the most recent full-year payment of $1.44. 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.

United Bankshares Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. United Bankshares has impressed us by growing EPS at 8.6% per year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

United Bankshares Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. 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.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for United Bankshares that investors should take into consideration. 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.