Three days left until WesBanco, Inc. (NASDAQ: WSBC) trades excluding dividend
WesBanco, Inc. (NASDAQ: WSBC) is set to trade off dividend within the next three days. The ex-dividend date occurs one day before the record date, which is the day on which shareholders must be on the books of the company to receive a dividend. The ex-dividend date is important because any share transaction must have been settled before the registration date to be eligible for a dividend. As a result, WesBanco investors who buy the shares on or after June 10 will not receive the dividend, which will be paid on July 1.
The company’s next dividend will be US $ 0.33 per share, and over the past 12 months, the company has paid a total of US $ 1.32 per share. Looking at the last 12 months of distributions, WesBanco has a sliding return of about 3.4% on its current price of $ 38.88. Dividends are a major contributor to returns on investment for long-term holders, but only if the dividend continues to be paid. You have to see if the dividend is covered by profits and if it increases.
See our latest review for WesBanco
If a company pays more dividends than it has earned, then the dividend could become unsustainable – which is not an ideal situation. WesBanco paid out more than half (52%) of its profits last year, which is a steady payout ratio for most companies.
Companies that pay less dividends than they earn profits generally have more sustainable dividends. The lower the payout ratio, the more leeway the company has before being forced to reduce the dividend.
Click here to view the company’s payout ratio, as well as analysts’ estimates of its future dividends.
Have profits and dividends increased?
Stocks of companies that generate sustainable earnings growth often offer the best dividend prospects because it’s easier to raise the dividend when earnings rise. If business goes into recession and the dividend is reduced, the company could experience a sharp drop in value. With that in mind, we are encouraged by the steady growth of WesBanco, with earnings per share up 2.8% on average over the past five years.
Another key way to measure a company’s dividend outlook is to measure its historical rate of dividend growth. Over the past 10 years, WesBanco has increased its dividend to around 9.0% per year on average. It is encouraging to see the company raising its dividends as profits rise, suggesting at least some corporate interest in rewarding shareholders.
The bottom line
From a dividend perspective, should investors buy or avoid WesBanco? WesBanco generated some growth in earnings per share while paying more than half of its earnings to shareholders in the form of dividends. It doesn’t seem like an exceptional opportunity, but it might be worth a closer look.
However, if you are still interested in WesBanco as a potential investment, you should definitely take into account some of the risks associated with WesBanco. Be aware that WesBanco shows 2 warning signs in our investment analysis, and 1 of them is potentially serious …
If you are in the dividend-paying stock market, we recommend that you check out our list of the highest dividend-paying stocks with a yield above 2% and a future dividend.
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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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