Assessing the Sustainability of Wintrust Financial Corp's Dividend
Wintrust Financial Corp (NASDAQ:WTFC) recently announced a dividend of $0.45 per share, payable on 2024-02-22, with the ex-dividend date set for 2024-02-07. 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 Wintrust Financial Corp's dividend performance and assess its sustainability.
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Wintrust Financial Corp is a financial holding company operating in the Chicago metropolitan area and southern Wisconsin through its wholly-owned banking subsidiaries. Wintrust conducts its business through three segments: community banking, specialty finance, and wealth management. Among other services, the company provides community-oriented, personal, and commercial banking, as well as the origination and purchase of residential mortgages for sale into the secondary market. A majority of its banks are banks chartered by the state of Illinois with scores of locations. The company has historically grown through both de novo organization and acquisitions. A majority of its loan portfolio is commercial, mostly in real estate. A majority of Wintrust's net revenue is net interest income.
Wintrust Financial Corp's Dividend Analysis
A Glimpse at Wintrust Financial Corp's Dividend History
Wintrust Financial Corp has maintained a consistent dividend payment record since 2000. Dividends are currently distributed on a quarterly basis. Wintrust Financial Corp has increased its dividend each year since 2010. 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 Wintrust Financial Corp's Dividend Yield and Growth
As of today, Wintrust Financial Corp currently has a 12-month trailing dividend yield of 1.72% and a 12-month forward dividend yield of 1.92%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, Wintrust Financial Corp's annual dividend growth rate was 10.80%. Extended to a five-year horizon, this rate increased to 18.80% per year. And over the past decade, Wintrust Financial Corp's annual dividends per share growth rate stands at an impressive 23.30%.
Based on Wintrust Financial Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Wintrust Financial Corp stock as of today is approximately 4.07%.
Wintrust Financial Corp's Dividend Analysis
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 2023-12-31, Wintrust Financial Corp's dividend payout ratio is 0.17.
Wintrust Financial Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Wintrust Financial Corp's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Wintrust Financial Corp's growth rank of 6 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Wintrust Financial Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Wintrust Financial Corp's revenue has increased by approximately 8.80% per year on average, a rate that outperforms approximately 62.06% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Wintrust Financial Corp's earnings increased by approximately 10.10% per year on average, a rate that outperforms approximately 53.61% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.60%, which outperforms approximately 57.19% of global competitors.
Engaging Conclusion: Wintrust Financial Corp's Dividend Outlook
In conclusion, Wintrust Financial Corp's commitment to consistent dividend growth, combined with a prudent payout ratio and solid profitability, paints a promising picture for dividend-seeking investors. The company's ability to grow its revenue and earnings at a rate that outperforms many of its global competitors bodes well for the sustainability of its dividends. While past performance is not indicative of future results, the disciplined approach to financial management at Wintrust Financial Corp suggests that its dividends are well-positioned for continued growth. Value investors may find Wintrust Financial Corp an attractive option to consider for their portfolios, especially those looking for a blend of income and growth potential. Will Wintrust Financial Corp maintain its dividend achiever status in the years to come? Only time will tell, but the current indicators are certainly encouraging.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
