Regional banks to consider for dividend income and stock price appreciation – PacWest Bancorp, SouthState Corporation, and Webster Financial.
American regional banks are an important source of dividend income and are often overlooked by investors. While branch banking may be dying in the United States, as suggested by the alarming rate of closing branches when compared to new bank openings, some of these regional banks managed to reposition themselves and continue to contribute to maximizing their shareholders’ wealth.
Here are three names to consider for dividend income in a sector often marginalized by investors: PacWest Bancorp, SouthState Corporation, and Webster Financial.
PacWest Bancorp is one regional bank with the strongest stock price performance in 2021. The price of one share more than doubled in one year, while at the same time investors were paid hefty quarterly dividends.
The company has a strong dividend policy and a payout ratio of 20.05% while the dividend yield is 2.06%. It operates through a network of 70 full-service branches in California and trades at a P/E ratio of 9.79, well below the sector median of 11.53.
SouthState Corporation is another regional bank with a strong dividend policy. It has a dividend growth history of 10 years and a dividend yield of 2.39% while the payout ratio is 26.72%.
The stock price is up more than 20% in the last year and revenue grows at an outstanding pace of +115.04% YoY. Furthermore, the company trades at a P/E ratio of 11.08, lower than the sector median by -3.96%.
Webster Financial is the holding group for Webster Bank and National Association. It provides various banking products and services and operates a network of close to 300 ATMs and more than 150 banking centers.
The company has a healthy dividend policy and the dividend yield is currently 2.76%. The five-year dividend growth rate exceeds 10% and the payout ratio is 34.38%. Webster Financial pays a quarterly dividend and is trading at a P/E ratio of just 12.77 when compared to the 11.53 sector median. Finally, the stock price outperformed the market this year, up +37.3% YTD.