Webster Financial's (NYSE:WBS) Dividend Will Be $0.40

The board of Webster Financial Corporation (NYSE:WBS) has announced that it will pay a dividend of $0.40 per share on the 13th of November. Based on this payment, the dividend yield will be 4.3%, which is fairly typical for the industry.

See our latest analysis for Webster Financial

Webster Financial's Dividend Forecasted To Be Well Covered By Earnings

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue.

Webster Financial has a long history of paying out dividends, with its current track record at a minimum of 10 years. Based on Webster Financial's last earnings report, the payout ratio is at a decent 31%, 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 28.6%. The future payout ratio could be 27% over that time period, according to analyst estimates, which is a good look for the future of the dividend.

Webster Financial Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2013, the annual payment back then was $0.40, compared to the most recent full-year payment of $1.60. This works out to be a compound annual growth rate (CAGR) of approximately 15% a year over that time. We can see that payments have shown some very nice upward momentum without faltering, which provides some reassurance that future payments will also be reliable.

Webster Financial Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Webster Financial has impressed us by growing EPS at 8.4% per year over the past five years. Webster Financial definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Webster Financial 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 company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. All in all, this checks a lot of the boxes we look for when choosing an income stock.

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. Earnings growth generally bodes well for the future value of company dividend payments. See if the 11 Webster Financial analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is Webster Financial not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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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.