Hancock Whitney (HWC) Raised Its Dividend, Is The Stock Still Trading At A Discount?
Dividend change puts Hancock Whitney stock in focus
Hancock Whitney (HWC) has drawn fresh investor attention after raising its annualized dividend by 11.1%, keeping the payout ratio at 33% and offering a yield above both the Banks - Southeast group and the S&P 500.
See our latest analysis for Hancock Whitney.
At a share price of $78.25, Hancock Whitney has seen its 90 day share price return of 17.39% and year to date share price return of 21.39% translate into a 1 year total shareholder return of 33.24%. The 3 year total shareholder return of 111.23% points to strong longer term compounding, with momentum that has recently cooled slightly after the dividend announcement.
If this kind of long run compounding has your attention, it can be useful to see what else is out there and uncover 21 top founder-led companies
For Hancock Whitney, the higher yield and stronger recent returns could point to a business that is simply catching up to its fundamentals, or to sentiment running ahead of itself. How does the current valuation stack up against that backdrop?
Most Popular Narrative: 6.4% Undervalued
At a last close of $78.25, the most followed narrative on Hancock Whitney points to a fair value of $83.60, which implies modest undervaluation and puts the focus on what is driving those expectations.
The analysts have a consensus price target of $83.6 for Hancock Whitney based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $91.0, and the most bearish reporting a price target of just $74.0.
Want to see what sits behind that spread in expectations? The narrative leans on stronger earnings power, changing margins and a very specific future earnings multiple. The full story connects those moving parts into one valuation view.
Result: Fair Value of $83.60 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Hancock Whitney still faces credit risk from small business exposure and the possibility that loan growth or deposit trends soften, which could challenge today’s upbeat narrative.
Find out about the key risks to this Hancock Whitney narrative.
Another view on Hancock Whitney valuation
The analyst narrative points to Hancock Whitney being 6.4% undervalued at $83.60. A different lens comes from the SWS DCF model, which estimates future cash flow value at $138.91. That is a much larger gap than the analyst target. Which set of assumptions do you find more realistic?
Look into how the SWS DCF model arrives at its fair value.
Next Steps
With Hancock Whitney pulling in both risks and rewards, it makes sense to look at the data for yourself and move quickly while sentiment is still mixed. To get a balanced picture of what could go right and what might hold the stock back, start by reviewing the 3 key rewards and 1 important warning sign.
Looking for more investment ideas beyond Hancock Whitney?
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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