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Huntington Bancshares Incorporated (NASDAQ:HBAN) is about to trade ex-dividend in the next 4 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 as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. This means that investors who purchase Huntington Bancshares' shares on or after the 15th of September will not receive the dividend, which will be paid on the 2nd of October.
The company's next dividend payment will be US$0.15 per share, and in the last 12 months, the company paid a total of US$0.62 per share. Based on the last year's worth of payments, Huntington Bancshares stock has a trailing yield of around 5.7% on the current share price of $10.87. 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.
Check out our latest analysis for Huntington Bancshares
Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Fortunately Huntington Bancshares's payout ratio is modest, at just 39% of profit.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. 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.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, Huntington Bancshares has lifted its dividend by approximately 15% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.