Hancock Whitney (HWC) is a Top Dividend Stock Right Now: Should You Buy?
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Hancock Whitney in Focus
Hancock Whitney (HWC) is headquartered in Gulfport, and is in the Finance sector. The stock has seen a price change of 12.55% since the start of the year. The holding company of Whitney Bank and Hancock Bank is currently shelling out a dividend of $0.27 per share, with a dividend yield of 2.77%. This compares to the Banks - Southeast industry's yield of 1.89% and the S&P 500's yield of 1.88%.
Looking at dividend growth, the company's current annualized dividend of $1.08 is up 5.9% from last year. Hancock Whitney has increased its dividend 1 times on a year-over-year basis over the last 5 years for an average annual increase of 2.29%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, Hancock Whitney's payout ratio is 26%, which means it paid out 26% of its trailing 12-month EPS as dividend.
HWC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $4.07 per share, representing a year-over-year earnings growth rate of 1.88%.
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, HWC is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.