WesBanco's (NASDAQ:WSBC) Dividend Will Be $0.35

WesBanco, Inc. (NASDAQ:WSBC) has announced that it will pay a dividend of $0.35 per share on the 2nd of October. This means the annual payment is 5.5% of the current stock price, which is above the average for the industry.

View our latest analysis for WesBanco

WesBanco's Payment Expected To Have Solid Earnings Coverage

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

WesBanco has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on WesBanco's last earnings report, the payout ratio is at a decent 45%, meaning that the company is able to pay out its dividend with a bit of room to spare.

Over the next year, EPS is forecast to fall by 12.3%. But if the dividend continues along recent trends, we estimate the future payout ratio could be 55%, which we would consider to be quite comfortable looking forward, with most of the company's earnings left over to grow the business in the future.

WesBanco Has A Solid Track Record

The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the dividend has gone from $0.72 total annually to $1.40. This implies that the company grew its distributions at a yearly rate of about 6.9% over that duration. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.

WesBanco May Find It Hard To Grow The Dividend

Investors could be attracted to the stock based on the quality of its payment history. However, WesBanco has only grown its earnings per share at 4.7% per annum over the past five years. WesBanco is struggling to find viable investments, so it is returning more to shareholders. While this isn't necessarily a negative, it definitely signals that dividend growth could be constrained in the future unless earnings start to pick up again.

We Really Like WesBanco's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. 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. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Taking the debate a bit further, we've identified 1 warning sign for WesBanco that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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