United Bankshares' (NASDAQ:UBSI) Upcoming Dividend Will Be Larger Than Last Year's

United Bankshares, Inc. (NASDAQ:UBSI) will increase its dividend on the 2nd of January to $0.38, which is 2.7% higher than last year's payment from the same period of $0.37. This will take the dividend yield to an attractive 4.0%, providing a nice boost to shareholder returns.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

United Bankshares' Earnings Will Easily Cover The Distributions

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable.

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 48%, meaning that the company is able to pay out its dividend with a bit of room to spare.

The next 3 years are set to see EPS grow by 22.0%. Analysts estimate the future payout ratio will be 44% over the same time period, which is in the range that makes us comfortable with the sustainability of the dividend.

Check out our latest analysis for United Bankshares

United Bankshares Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2015, the annual payment back then was $1.28, compared to the most recent full-year payment of $1.48. This implies that the company grew its distributions at a yearly rate of about 1.5% over that duration. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

United Bankshares Could Grow Its Dividend

Investors could be attracted to the stock based on the quality of its payment history. United Bankshares has seen EPS rising for the last five years, at 5.9% per annum. 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 this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. 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. 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. Is United Bankshares not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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