The banking sector is facing challenges amid the current operating backdrop, with expectations of an economic slowdown in the near term. Hence, solid dividend-yielding stocks should be on investors’ radar. Today, we are discussing one such stock, Huntington Bancshares HBAN.

This Columbus, OH-based multi-state diversified regional bank, through its banking subsidiary, The Huntington National Bank, provides a comprehensive suite of banking, payments, wealth management, and risk management products and services.

HBAN has been paying its quarterly dividends on a regular basis and raising the same. The last hike of 3.3% to 15.5 cents per share was announced in October 2021. Over the past five years, it increased dividends twice, with an annualized dividend growth rate of 2.03%.

Considering the Oct 22 closing price of $10.87 per share, Huntington’s current dividend yield is pegged at 5.7%. This is impressive compared with the industry’s average of 3.7% and attracts investors as it represents a steady income stream.

Huntington Bancshares Incorporated Dividend Yield (TTM)

 

Huntington Bancshares Incorporated dividend-yield-ttm | Huntington Bancshares Incorporated Quote

Is Huntington stock worth a look to earn a high dividend yield? Let’s check the company’s fundamentals to understand its risks and rewards for making a proper investment decision.

Apart from regular quarterly dividend payouts, HBAN has a share repurchase program in place. In January 2023, the company’s board authorized the repurchase of common shares worth $1 billion till Dec 31, 2024.

However, it did not repurchase shares under the current authorization in the first nine months of 2023. Also, to improve its capital position, management does not expect to utilize this program in the current year as part of its 2023 plan.

As of Sep 30, 2023, Huntington had liquidity, comprising cash and contingent borrowing capacity, of $91 billion. The company’s largest source of liquidity is core deposits. Its core deposits were $144.2 billion in third-quarter 2023 end and comprised 97% of total deposits. During the same period, it had total debt (comprising long-term debt and short-term borrowings) of $13.5 billion. Given its decent liquidity, dividend payments seem sustainable.

Huntington, one of the top 20 bank holding companies in the United States, remains focused on acquiring the industry's best deposit franchise. The company’s total deposits witnessed a four-year compounded annual growth rate (CAGR) of 21.6% in 2022. The rising trend continued in the first nine months of 2023.