Yahoo Finance Webster Financial (NYSE:WBS) Is Due To Pay A Dividend Of $0.40
Webster Financial Corporation (NYSE:WBS) has announced that it will pay a dividend of $0.40 per share on the 16th of May. Based on this payment, the dividend yield will be 3.6%, which is fairly typical for the industry.
View our latest analysis for Webster Financial
Webster Financial's Payment Expected To Have Solid Earnings Coverage
Solid dividend yields are great, but they only really help us if the payment is sustainable.
Having distributed dividends for at least 10 years, Webster Financial has a long history of paying out a part of its earnings to shareholders. Based on Webster Financial's last earnings report, the payout ratio is at a decent 33%, 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 32.6%. Analysts forecast the future payout ratio could be 26% over the same time horizon, which is a number we think the company can maintain.
Webster Financial Has A Solid Track Record
The company has a sustained record of paying dividends with very little fluctuation. Since 2014, the annual payment back then was $0.60, compared to the most recent full-year payment of $1.60. This implies that the company grew its distributions at a yearly rate of about 10% over that duration. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.
Webster Financial May Find It Hard To Grow The Dividend
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, Webster Financial has only grown its earnings per share at 3.8% per annum over the past five years. While growth may be thin on the ground, Webster Financial could always pay out a higher proportion of earnings to increase shareholder returns.
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 of these factors considered, we think this has solid potential as a dividend stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Taking the debate a bit further, we've identified 1 warning sign for Webster Financial that investors need to be conscious of moving forward. 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.
