May 25, 2025 a 12:46 pm
HBAN: Dividend Analysis - Huntington Bancshares Incorporated
Huntington Bancshares Incorporated demonstrates strong dividend stability with a history spanning over 42 years, showcasing a robust commitment to shareholder returns. The current dividend yield of 4.05% combined with consistent dividend payments affirms its appeal to income-focused investors. Despite the financial challenges and market volatilities, the company's ability to sustain and grow dividends underscores its financial discipline and strategic foresight.
Overview
Huntington Bancshares Incorporated stands out within its sector with an attractive dividend profile. The substantial dividend yield of 4.05%, coupled with a durable history of uninterrupted dividends over 42 years, speaks volumes about its resilience and financial prudence within volatile market environments.
| Sector | Dividend Yield | Current Dividend/Share | Dividend History | Last Cut/Suspension |
|---|---|---|---|---|
| Financials | 4.05% | 0.72 USD | 42 years | None |
Dividend History
With a dividend history extending across decades, Huntington Bancshares highlights a reliable and growing income stream for its investors. Maintaining a historical consistency in payments, it assures stakeholders of its dividend integrity, earned through judicious capital management.
| Year | Dividend/Share (USD) |
|---|---|
| 2025 | 0.31 |
| 2024 | 0.62 |
| 2023 | 0.62 |
| 2022 | 0.62 |
| 2021 | 0.605 |
Dividend Growth
The average dividend growth over recent years provides a crucial indicator of the company's potential for long-term income generation. Here, Huntington's modest but consistent growth establishes it as a dependable option for dividend investors.
| Time | Growth |
|---|---|
| 3 years | 0.82% |
| 5 years | 1.34% |
The average dividend growth is 1.34% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio
The payout ratio is a critical factor in assessing the sustainability of a dividend. A balanced EPS payout ratio of 51.18% indicates that Huntington maintains room for safety, ensuring dividends are well-covered by earnings.
| Key figure | Ratio |
|---|---|
| EPS-based | 51.18% |
| Free Cash Flow-based | 54.45% |
The EPS payout ratio at 51.18% and FCF payout at 54.45% are healthy, indicating prudent capital management without overly relying on earnings or cash reserves, providing a balance between distribution and reinvestment.
Cashflow & Capital Efficiency
Assessing cash flow dynamics is instrumental for understanding a firm's financial health. Huntington's capacity to generate steady free cash flow supports its dividend obligations, rendering it an attractive proposition for investors seeking stable income sources.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 7.08% | 13.68% | 18.76% |
| Earnings Yield | 8.22% | 10.60% | 11.01% |
| CAPEX to Operating Cash Flow | 0% | 5.27% | 5.31% |
| Stock-based Compensation to Revenue | 1.44% | 1.40% | 1.45% |
| Free Cash Flow/Operating Cash Flow Ratio | 92.12% | 94.73% | 94.69% |
The analysis indicates a robust cash flow with efficient capital use and low CAPEX requirements, reinforcing the company's ability to continue supporting dividend payments reliably.
Balance Sheet & Leverage Analysis
Evaluating the balance sheet, Huntington exhibits a commendable management of leverage, with controlled levels of debt relative to equity, assets, and capital ratios, enhancing its fiscal solidity.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 0.83 | 0.64 | 0.65 |
| Debt-to-Assets | 0.08 | 0.07 | 0.06 |
| Debt-to-Capital | 0.45 | 0.39 | 0.39 |
| Net Debt to EBITDA | N/A | N/A | N/A |
| Current Ratio | 145.52 | 5064.5 | 10.09 |
| Quick Ratio | 145.52 | 5064.5 | 10.09 |
| Financial Leverage | 10.35 | 9.78 | 10.32 |
The company's balance sheet indicates adept handling of leverage and liquidity, reducing risk and supporting its capacity to fulfill debt obligations without compromising dividend payouts.
Fundamental Strength & Profitability
Huntington Bancshares' fundamental metrics reveal profound profitability, with returns on equity holding strong, backed by robust margin performances ensuring consistent returns to stakeholders.
| Year | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 9.83% | 10.08% | 12.62% |
| Return on Assets | 0.95% | 1.03% | 1.22% |
| Net Margin | 26.27% | 28.09% | 30.85% |
| EBIT Margin | -8.42% | 34.33% | 38.10% |
| EBITDA Margin | N/A | N/A | N/A |
| Gross Margin | 100% | 100% | 100% |
| Research & Development to Revenue | 0% | 0% | 0% |
The robust return measures and margins exhibit strong profitability under difficult economic conditions, affirming Huntington's resilience and capability of sustaining its growth trajectory.
Dividend Scoring System
| Criteria | Score | |
|---|---|---|
| Dividend yield | 4 | |
| Dividend Stability | 5 | |
| Dividend growth | 3 | |
| Payout ratio | 4 | |
| Financial stability | 4 | |
| Dividend continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Overall Score: 33/40
Rating
In conclusion, Huntington Bancshares Incorporated presents a strong investment case as a consistent dividend-paying company with a commendable balance sheet, solid cash flow performance, and prudent payout ratios. It receives a cumulative score of 33 out of 40 on our dividend scoring system, making it a promising choice for income-oriented investors aiming for stable returns.