Webster Financial Corp's Dividend Analysis
Understanding the Past, Present and Future of WBS Dividends
Webster Financial Corp(NYSE:WBS) recently announced a dividend of $0.4 per share, payable on 2023-11-13, with the ex-dividend date set for 2023-11-02. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Webster Financial Corps dividend performance and assess its sustainability.
What Does Webster Financial Corp Do?
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Webster Financial Corp is a full-service provider of financial services, offering commercial and consumer banking, mortgages, and investment advisory along with trust and wealth management services in Connecticut, New York, Rhode Island, Massachusetts, and Pennsylvania. The company's segment includes Commercial Banking, HSA Bank, and Consumer Banking. It generates maximum revenue from the Commercial Banking segment.
A Glimpse at Webster Financial Corp's Dividend History
Webster Financial Corp has maintained a consistent dividend payment record since 1987. Dividends are currently distributed on a quarterly basis. Webster Financial Corp has increased its dividend each year since 2009. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 14 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Webster Financial Corp's Dividend Yield and Growth
As of today, Webster Financial Corp currently has a 12-month trailing dividend yield of 4.21% and a 12-month forward dividend yield of 4.21%. This suggests an expectation of same dividend payments over the next 12 months.
Over the past three years, Webster Financial Corp's annual dividend growth rate was 1.50%. Extended to a five-year horizon, this rate increased to 8.90% per year. And over the past decade, Webster Financial Corp's annual dividends per share growth rate stands at an impressive 15.10%.
Based on Webster Financial Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Webster Financial Corp stock as of today is approximately 6.45%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Webster Financial Corp's dividend payout ratio is 0.30.