Western Alliance Bancorporation (NYSE:WAL) Is Paying Out A Larger Dividend Than Last Year

Western Alliance Bancorporation (NYSE:WAL) will increase its dividend on the 29th of November to $0.38, which is 2.7% higher than last year's payment from the same period of $0.37. Although the dividend is now higher, the yield is only 1.6%, which is below the industry average.

View our latest analysis for Western Alliance Bancorporation

Western Alliance Bancorporation's Payment Expected To Have Solid Earnings Coverage

While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.

Western Alliance Bancorporation has a good history of paying out dividends, with its current track record at 5 years. Using data from its latest earnings report, Western Alliance Bancorporation's payout ratio sits at 23%, an extremely comfortable number that shows that it can pay its dividend.

The next 3 years are set to see EPS grow by 82.3%. The future payout ratio could be 15% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Western Alliance Bancorporation Doesn't Have A Long Payment History

It is great to see that Western Alliance Bancorporation has been paying a stable dividend for a number of years now, however we want to be a bit cautious about whether this will remain true through a full economic cycle. Since 2019, the dividend has gone from $1.00 total annually to $1.48. This works out to be a compound annual growth rate (CAGR) of approximately 8.2% a year over that time. The dividend has been growing as a reasonable rate, which we like. However, investors will probably want to see a longer track record before they consider Western Alliance Bancorporation to be a consistent dividend paying stock.

We Could See Western Alliance Bancorporation's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Western Alliance Bancorporation has grown earnings per share at 6.4% per year over the past five years. Western Alliance Bancorporation definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Our Thoughts On Western Alliance Bancorporation's Dividend

Overall, it's great to see the dividend being raised and that it is still in a sustainable range. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.

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 2 warning signs for Western Alliance Bancorporation that investors should take into consideration. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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