Published on July 9th, 2024 by Felix Martinez
High-yield stocks pay out dividends that are significantly more than market average dividends. For example, the S&P 500’s current yield is only ~1.2%.
High-yield stocks can be very helpful to shore up income after retirement. A $120,000 investment in stocks with an average dividend yield of 5% creates an average of $500 a month in dividends.
We have created a spreadsheet of stocks (and closely related REITs and MLPs, etc.) with dividend yields of 5% or more…
You can download your free full list of all securities with 5%+ yields (along with important financial metrics such as dividend yield and payout ratio) by clicking on the link below:
Wesbanco Inc. (WSBC) is part of our ‘High Dividend 50’ series, where we cover the 50 highest yielding stocks in the Sure Analysis Research Database.
Next on our list of high-dividend stocks to review is Wesbanco, Inc.
Business Overview
Source: Investor Presentations
Growth Prospects
WesBanco, Inc. demonstrates promising growth prospects through its strategic expansion and diversified service offerings.
With total loans growing by 9.0% year-over-year, driven primarily by a 9.3% increase in commercial loans, WesBanco is well-positioned to capitalize on the robust demand for commercial real estate and business financing.
The record $1.2 billion commercial pipeline as of March 31, 2024, underscores the potential for sustained loan growth.
Source: Investor Presentations
In addition to loan growth, WesBanco’s ability to attract and retain deposits is a key driver of its growth prospects. Total deposits increased by 4.8% year-over-year to $13.5 billion, reflecting the success of WesBanco’s deposit-gathering initiatives.
The stable composition of deposits, with demand deposits representing 55% of the total, ensures a solid foundation for funding future loan growth.
Moreover, the increase in non-interest income by 10.8% year-over-year, supported by new revenue streams such as commercial loan swaps and wealth management fees, highlights the company’s effective diversification strategy.
WesBanco’s commitment to maintaining high credit quality and managing operational expenses enhances its growth outlook. Despite a slight increase in criticized and classified loans, key credit quality metrics remain strong, with low levels of non-performing assets and net charge-offs.
Effective management of staffing levels and marketing costs has led to a decline in non-interest expenses, contributing to improved operational efficiency.
Competitive Advantages & Recession Performance
WesBanco benefits from several competitive advantages that enhance its market position and resilience. One key strength is its diversified portfolio of financial services, which includes commercial and personal banking, mortgage banking, and wealth management.
Additionally, the company’s strong regional presence across multiple states, with over 200 branches, provides a stable and expansive customer base, fostering both growth and stability.
Another significant competitive advantage for WesBanco is its commitment to maintaining high credit quality and operational efficiency.
Key metrics such as non-performing assets and total past due loans have stayed low and favorable compared to peer banks. The allowance for credit losses at the end of the quarter was 1.09% of total loans, excluding fair market value adjustments on previously acquired loans.
WesBanco’s performance during economic downturns further underscores its resilience. Historically, the company has demonstrated an ability to maintain strong credit quality metrics and stable earnings even during recessions.
Dividend Analysis
Wesbanco, Inc.’s current annual dividend is $1.44 per share. At $27.11, it has a high yield of 5.31%.
Given Wesbanco, Inc.’s outlook for 2024, EPS is expected to be $2.20. As a result, the company is expected to pay out roughly 65% of its EPS to shareholders in dividends.
In the meantime, the dividend appears sustainable, and we estimate the company will grow it at a 2% rate going forward.
The 5.31% dividend yield is desirable for investors focusing primarily on income.
Final Thoughts
The share price of WSBC has increased by 21% in the last year, underperforming the S&P 500 Index’s 25% gain.
WSBC can still offer 5.8% annual total returns from 5.0% EPS growth and the 5.31% yield, partly offset by P/E multiple contractions.
High-Yield Individual Security Research
- 20 Highest Yielding Monthly Dividend Stocks
- 10 Super High Dividend REITs
- 5 Highest Yielding Royalty Trusts
Other Sure Dividend Resources
- Dividend Kings: 50+ years of rising dividends
- Dividend Champions: 25+ years of rising dividends
- Dividend Aristocrats: 25+ years of rising dividends and in the S&P 500
- Dividend Achievers: 10+ years of rising dividends and in the NASDAQ
- Monthly Dividend Stocks: Individual securities that pay out every month
- MLPs: List of MLPs and more
- REITs: List of REITs and more
- BDCs: List of BDCs and more