Hancock Whitney (HWC) Could Be a Great Choice

Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.

Cash flow can come from bond interest, interest from other types of investments, and, of course, dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Based in Gulfport, Hancock Whitney (HWC) is in the Finance sector, and so far this year, shares have seen a price change of 6.45%. The holding company of Whitney Bank and Hancock Bank is currently shelling out a dividend of $0.45 per share, with a dividend yield of 3.09%. This compares to the Banks - Southeast industry's yield of 2.44% and the S&P 500's yield of 1.53%.

Looking at dividend growth, the company's current annualized dividend of $1.80 is up 20% from last year. Over the last 5 years, Hancock Whitney has increased its dividend 3 times on a year-over-year basis for an average annual increase of 11.55%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Hancock Whitney's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for HWC for this fiscal year. The Zacks Consensus Estimate for 2025 is $5.60 per share, with earnings expected to increase 5.26% from the year ago period.

Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.

For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, HWC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).

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This article originally published on Zacks Investment Research (zacks.com).

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