WASHINGTON - United Bankshares , Inc. (NASDAQ: NASDAQ:UBSI) announced a 2.8% increase in its quarterly cash dividend, marking the 50th consecutive year of dividend hikes. The company will pay out a 37-cent dividend per share to investors on record as of December 8, with the payment scheduled for January 2, 2024. Richard M. Adams, Jr., the CEO of United Bankshares, credited the company's strong performance and low-risk profile for enabling a consistent return to shareholders.
United Bankshares has shown a commitment to shareholder returns with a five-year annualized dividend growth rate of 1.38% and maintains a payout ratio that is half of its earnings. Based on Monday's closing stock price of $30.06, UBSI's dividend yield stands at an impressive 4.92%, surpassing the industry average yield of 3.19%.
The bank's financial health is further underscored by its Share Repurchase Program, which was initiated in May 2022 and allows for up to 4.75 million shares to be repurchased. During the first nine months of 2022, UBSI repurchased around 2.3 million shares at an average price of $34.69 each. However, no shares were repurchased in the first nine months of this year, leaving approximately 4.37 million shares available for buyback under the current authorization.
Despite facing economic headwinds that have seen a decrease in its stock price by 4.8% over the past three months, United Bankshares maintains a Zacks Rank #2 (Buy), signaling potential growth ahead for investors. This positive outlook is shared by other financial institutions like Bank OZK (NASDAQ:OZK) and City Holding Company (NASDAQ:CHCO), which have also raised their dividends.
United Bankshares' ability to sustain regular dividend increases is supported by its strong liquidity position, with high cash levels relative to long-term borrowings—a reassuring sign for investors even as economic conditions show signs of deterioration.
InvestingPro Insights
According to InvestingPro's real-time data, United Bankshares, Inc. (UBSI) has a market cap of $4370M and a P/E ratio of 11.29. In terms of earnings, the company has shown high earnings quality with free cash flow exceeding net income, as highlighted by one of the InvestingPro Tips. This fact, along with the company's history of raising its dividend for 35 consecutive years, demonstrates a strong financial performance and commitment to shareholders.
Another crucial InvestingPro Tip to note is the company's strong return over the past month. This aligns with the data showing a 13.78% return over the past month, which could be indicative of potential growth ahead for investors.
InvestingPro offers many more tips and real-time data metrics for those interested in gaining a deeper understanding of the financial market. For instance, for UBSI, there are 9 additional tips and numerous other data metrics available on InvestingPro.
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