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United Bankshares (USBI) Stock Up on 2.9% Dividend Hike

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Shares of United Bankshares, Inc. rallied 1.8% in response to the announcement of a quarterly dividend hike. The company has announced a dividend of 36 cents per share, which represents a hike of 2.9% from the prior payout. The dividend will be paid out on Jan 3, 2022, to shareholders on record as of Dec 2, 2021.

In aggregate, United Bankshares will pay nearly $46.5 million on 129.2 million shares. Prior to the recent hike, the company had announced an increase in its quarterly dividend by 2.9% to 35 cents per share in November 2019. Last year, amid the COVID-19 mayhem and resultant uncertainty, the company had maintained dividends at the same level.

Considering the last day’s closing price of $38.87 per share, United Bankshares’ dividend yield currently stands at 3.70%. Not only is the yield attractive for income investors, but it also represents a steady income stream. The yield is also substantial compared with the industry average of 1.73%.

Apart from dividend payments, United Bankshares has a share repurchase program in place. In October 2019, the company’s board of directors had approved a buyback plan of up to 4 million shares. As of Sep 30, 2021, approximately 3.03 million shares remained under the authorization.

Further, United Bankshares has been actively pursuing acquisitions. The company’s last buyout was closed in May 2020, when it acquired Charleston, SC-based Carolina Financial Corporation. At that time, Richard M. Adams, Chairman and CEO, had noted, “This transaction marks the 32nd acquisition of the current administration and expands our presence in some of the most desirable banking markets in the nation.”

Hence, United Bankshares’ robust business model highlights the company’s commitment toward enhancing value to shareholders with its strong cash-generation capabilities.

Over the past year, shares of United Bankshares have rallied 23.1%, underperforming 44% growth recorded by the industry it belongs to.

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Currently, United Bankshares carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Similar Steps by Other Banks

Last week, M&T Bank Corporation (MTB - Free Report) announced a dividend per share of $1.20, marking an increase of 9.1% from the prior payout. The dividend will be paid out on Dec 31 to shareholders on record as of Nov 30.

Since the 2008 financial crisis, when it paid out a dividend of 70 cents per share, M&T Bank has come a long way in displaying its capital and balance sheet strength. Prior to this hike, MTB had raised the quarterly dividend by 10% in November 2019 to $1.10 per share.

Last month, Bank OZK (OZK - Free Report) declared a quarterly cash dividend of 29 cents per share, reflecting a rise of 1.8% from the prior payout. The dividend was paid out on Oct 22 to shareholders on record as of Oct 15.

This was the 45th consecutive quarter of a dividend hike by Bank OZK. Prior to this, the company hiked its dividend by 1.8% to 28.5 cents per share in July. We believe that such disbursements highlight OZK’s operational strength and commitment toward enhancing shareholder wealth.

In September, JPMorgan (JPM - Free Report) announced a dividend of $1 per share, representing a hike of 11.1% from the prior payout. The dividend was paid out on Oct 31 to shareholders on record as of Oct 6.

In addition to paying regular dividends, JPMorgan has an efficient share buyback plan in place. For 2021, JPM authorized to repurchase shares worth up to $30 billion.

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