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Huntington Bancshares Incorporated (NASDAQ:HBAN) is about to trade ex-dividend in the next four days. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Therefore, if you purchase Huntington Bancshares' shares on or after the 15th of June, you won't be eligible to receive the dividend, when it is paid on the 3rd of July.
The company's next dividend payment will be US$0.15 per share. Last year, in total, the company distributed US$0.62 to shareholders. Based on the last year's worth of payments, Huntington Bancshares has a trailing yield of 5.7% on the current stock price of $10.95. If you buy this business for its dividend, you should have an idea of whether Huntington Bancshares's dividend is reliable and sustainable. As a result, readers should always check whether Huntington Bancshares has been able to grow its dividends, or if the dividend might be cut.
View our latest analysis for Huntington Bancshares
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Huntington Bancshares paid out a comfortable 39% of its profit last year.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. This is why it's a relief to see Huntington Bancshares earnings per share are up 8.9% per annum over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Huntington Bancshares has delivered an average of 15% per year annual increase in its dividend, based on the past 10 years of dividend payments. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.
The Bottom Line
From a dividend perspective, should investors buy or avoid Huntington Bancshares? Huntington Bancshares has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. Huntington Bancshares ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.