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U.S. Bancorp (USB) Cheers Investor With 2.1% Dividend Hike
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U.S. Bancorp (USB - Free Report) declared a quarterly cash dividend of 49 cents per share, marking an increase of 2.1% from the prior quarter. The dividend will be paid out on Jan 16, 2024, to shareholders of record as of Dec 29, 2023.
Prior to the recent hike, USB raised its dividend in September 2022 by 4.3% to 48 cents per share. Also, the company has a five-year annualized dividend growth of 5.7%. Currently, its payout ratio is 42% of earnings.
Considering yesterday’s closing price of $40.45, USB’s dividend yield is pegged at 4.84%, which is above the industry average of 3.90%.
Apart from regular dividend hikes, USB has a share repurchase program in place.However, owing to the MUFG Union Bank acquisition deal, U.S. Bancorp suspended share repurchases at the beginning of third-quarter 2021. The company is continuing the suspension as it intends to accrete its capital amid the likelihood of stringent regulatory capital requirements.
Nonetheless, given its consistent earnings and decent liquidity position, we believe that capital deployment activities might be sustainable and boost investor confidence in the stock.
U.S. Bancorp has a strong balance sheet. As of Sep 30, the company had a long-term debt of $43.07 billion. Cash and due from banks of $64.35 billion reflected a strong liquidity position. Hence, with a record of impressive earnings strength and decent cash levels, it carries low credit risk, and has a lesser likelihood of defaulting interest and debt repayments if the economic situation worsens.
Finally, the company enjoys long-term investment-grade credit ratings of A, A+ and A3 from Standard & Poor’s, Fitch, and Moody’s, respectively. This renders U.S. Bancorp favorable access to debt at attractive rates.
USB has experienced strong growth in average loans and deposits in the past few years, as it has continued to expand and deepen relationships with current customers, as well as acquire new customers and market share. Notably, the company’s average deposits and loans witnessed a three-year compound annual growth rate (CAGR) of 10.5% and 14.6%, respectively, in 2022. The rising trend for both metrics continued in the first nine months of 2023.
The company is expected to sustain its capital distribution activities, given a robust capital position, operational strength, and lower debt-equity and dividend payout ratios than its peers. Through this, U.S. Bancorp will keep enhancing shareholder value.
Over the past six months, USB shares have gained 26% compared with the industry’s rise of 10.3%.
United Bankshares, Inc. (UBSI - Free Report) announced a hike in its quarterly dividend for the 50th consecutive year. The company declared a quarterly cash dividend of 37 cents per share, marking an increase of 2.8% from the prior quarter. The dividend will be paid out on Jan 2, 2024, to shareholders of record as of Dec 8.
Richard M. Adams, Jr., UBSI’s chief executive officer, stated, "Fifty years of dividend growth is a testament to our proven track record as a high performing company with a low risk profile."
Bank OZK (OZK - Free Report) declared a quarterly cash dividend of 37 cents per share, marking an increase of 2.8% from the prior quarter. The dividend was paid out on Oct 20 to shareholders of record as of Oct 30. This represents the 53rd consecutive quarter of a dividend hike.
Prior to the recent hike, OZK raised its dividend by 2.8% to 36 cents per share in July 2023. Also, the company has a five-year annualized dividend growth of 10.6%. Currently, the company's payout ratio is 26% of earnings.
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U.S. Bancorp (USB) Cheers Investor With 2.1% Dividend Hike
U.S. Bancorp (USB - Free Report) declared a quarterly cash dividend of 49 cents per share, marking an increase of 2.1% from the prior quarter. The dividend will be paid out on Jan 16, 2024, to shareholders of record as of Dec 29, 2023.
Prior to the recent hike, USB raised its dividend in September 2022 by 4.3% to 48 cents per share. Also, the company has a five-year annualized dividend growth of 5.7%. Currently, its payout ratio is 42% of earnings.
Considering yesterday’s closing price of $40.45, USB’s dividend yield is pegged at 4.84%, which is above the industry average of 3.90%.
Apart from regular dividend hikes, USB has a share repurchase program in place.However, owing to the MUFG Union Bank acquisition deal, U.S. Bancorp suspended share repurchases at the beginning of third-quarter 2021. The company is continuing the suspension as it intends to accrete its capital amid the likelihood of stringent regulatory capital requirements.
Nonetheless, given its consistent earnings and decent liquidity position, we believe that capital deployment activities might be sustainable and boost investor confidence in the stock.
U.S. Bancorp has a strong balance sheet. As of Sep 30, the company had a long-term debt of $43.07 billion. Cash and due from banks of $64.35 billion reflected a strong liquidity position. Hence, with a record of impressive earnings strength and decent cash levels, it carries low credit risk, and has a lesser likelihood of defaulting interest and debt repayments if the economic situation worsens.
Finally, the company enjoys long-term investment-grade credit ratings of A, A+ and A3 from Standard & Poor’s, Fitch, and Moody’s, respectively. This renders U.S. Bancorp favorable access to debt at attractive rates.
USB has experienced strong growth in average loans and deposits in the past few years, as it has continued to expand and deepen relationships with current customers, as well as acquire new customers and market share. Notably, the company’s average deposits and loans witnessed a three-year compound annual growth rate (CAGR) of 10.5% and 14.6%, respectively, in 2022. The rising trend for both metrics continued in the first nine months of 2023.
The company is expected to sustain its capital distribution activities, given a robust capital position, operational strength, and lower debt-equity and dividend payout ratios than its peers. Through this, U.S. Bancorp will keep enhancing shareholder value.
Over the past six months, USB shares have gained 26% compared with the industry’s rise of 10.3%.
Image Source: Zacks Investment Research
U.S. Bancorp currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Banks Taking Similar Steps
United Bankshares, Inc. (UBSI - Free Report) announced a hike in its quarterly dividend for the 50th consecutive year. The company declared a quarterly cash dividend of 37 cents per share, marking an increase of 2.8% from the prior quarter. The dividend will be paid out on Jan 2, 2024, to shareholders of record as of Dec 8.
Richard M. Adams, Jr., UBSI’s chief executive officer, stated, "Fifty years of dividend growth is a testament to our proven track record as a high performing company with a low risk profile."
Bank OZK (OZK - Free Report) declared a quarterly cash dividend of 37 cents per share, marking an increase of 2.8% from the prior quarter. The dividend was paid out on Oct 20 to shareholders of record as of Oct 30. This represents the 53rd consecutive quarter of a dividend hike.
Prior to the recent hike, OZK raised its dividend by 2.8% to 36 cents per share in July 2023. Also, the company has a five-year annualized dividend growth of 10.6%. Currently, the company's payout ratio is 26% of earnings.