WesBanco's (NASDAQ:WSBC) Dividend Will Be Increased To $0.36

WesBanco, Inc. (NASDAQ:WSBC) has announced that it will be increasing its periodic dividend on the 2nd of January to $0.36, which will be 2.9% higher than last year's comparable payment amount of $0.35. This takes the dividend yield to 5.2%, which shareholders will be pleased with.

View our latest analysis for WesBanco

WesBanco's Payment Expected To Have Solid Earnings Coverage

If the payments aren't sustainable, a high yield for a few years won't matter that much.

WesBanco has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Taking data from its last earnings report, calculating for the company's payout ratio shows 50%, which means that WesBanco would be able to pay its last dividend without pressure on the balance sheet.

EPS is set to fall by 8.7% over the next 3 years. However, as estimated by analysts, the future payout ratio could be 56% over the same time period, which we think the company can easily maintain.

WesBanco Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2013, the dividend has gone from $0.76 total annually to $1.40. This means that it has been growing its distributions at 6.3% per annum over that time. The growth of the dividend has been pretty reliable, so we think this can offer investors some nice additional income in their portfolio.

WesBanco May Find It Hard To Grow The Dividend

Investors could be attracted to the stock based on the quality of its payment history. Earnings has been rising at 2.4% per annum over the last five years, which admittedly is a bit slow. WesBanco is struggling to find viable investments, so it is returning more to shareholders. This isn't bad in itself, but unless earnings growth pick up we wouldn't expect dividends to grow either.

We Really Like WesBanco's Dividend

Overall, a dividend increase is always good, and we think that WesBanco is a strong income stock thanks to its track record and growing earnings. The company is generating plenty of cash, and the earnings also quite easily cover the distributions. If earnings do fall over the next 12 months, the dividend could be buffeted a little bit, but we don't think it should cause too much of a problem in the long term. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for WesBanco that you should be aware of before investing. 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.