Regional Bank With Double-Digit Dividend Growth

I really like regional banks.

They have a lot of room to expand.

And they don’t get the attention of the massive banks, so you can really find some diamonds out there.

One regional bank should’ve been on my radar a long time ago.

I used to work with them!

Hancock Whitney (ticker: HWC) is a regional bank primarily operating in Mississippi and Louisiana.

Hancock Bank and Whitney Bank used to be separate banks, but they merged in 2011.

The company has been paying a dividend since 1967 and never skipped a payment, even during the financial crash in 2008.

Like most regional banks, Hancock Whitney kept its dividend flat for many years.

However, in the past few years, Hancock Whitney started raising its payment.

And its next increase is just around the corner.

Hancock Whitney is raising its dividend 11% to $0.50 each quarter.

If you want the higher payment, you need to own stock in Hancock Whitney by March 4th (Wednesday).

Otherwise, somebody else will be getting the check in the mail!

Hancock Whitney is being pretty aggressive with its dividend growth.

The regional bank paid only $0.27 just 4 years ago.

It almost doubled its dividend in the last 4 years!

Its dividend yield is hovering near 3%, which is right around the average for regional banks.

Let’s dig in more to see why I like Hancock Whitney so much.

Hancock Whitney’s profit margin of 32% is one of the highest in the regional banking industry.

Profitability matters a lot for every business, but there’s more.

Free cash flow is really important to us as dividend investors since it’s the source of our dividend checks.

A company not making enough free cash flow might need to stop raising its dividend or even cut payments.

Last year, Hancock Whitney made over $560 million in free cash flow.

And over the past 5 years, it’s averaging 15% growth in free cash flow every single year.

Hancock Whitney’s dividend payout ratio is amazing.

Last year, it only paid out 27% of its free cash flow in dividends.

A low payout ratio means it has a lot of room to continue to grow its dividend.

So if you’re looking for a regional bank with some dividend growth, Hancock Whitney should definitely be on your list.

What are some of your favorite regional banks?

Michael Jennings, Editor

This post originally appeared at Dividend Stocks Research.

Category: Dividend Stocks