Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Based in Gulfport, Hancock Whitney (HWC) is in the Finance sector, and so far this year, shares have seen a price change of 19.38%. Currently paying a dividend of $0.50 per share, the company has a dividend yield of 2.63%. In comparison, the Banks - Southeast industry's yield is 1.96%, while the S&P 500's yield is 1.34%.
Looking at dividend growth, the company's current annualized dividend of $2.00 is up 11.1% from last year. Over the last 5 years, Hancock Whitney has increased its dividend 3 times on a year-over-year basis for an average annual increase of 11.55%. 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. Hancock Whitney's current payout ratio is 34%, meaning it paid out 34% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HWC expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $6.47 per share, representing a year-over-year earnings growth rate of 13.11%.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that HWC is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Hancock Whitney Corporation (HWC): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).