Huntington Bancshares Drop Nearly 5% Despite Dividend Increase

Jul 21, 2011
J. Webster
Comments Off on Huntington Bancshares Drop Nearly 5% Despite Dividend Increase

Huntington Bank, stock ticker HBAN, declared a quarterly cash dividend of $0.04 per common share, which now gives the regional bank a dividend yield 2.5%, after quadrupling its payout from a penny a share. Huntington also beat the street by a penny, with earnings per share of $0.16 and net income of $145.9 million.

Despite all of this though, the stock touched $5.99 per share, a drop of nearly 5%. The stock then battled back throughout the day and now hovers around $6.12 per share. However, nearly all the other bank stocks are up big on the day. Most everyone on Twitter and the message boards is baffled by the stock’s drop, especially when they raised their dividend so much. Some say the stock is dead money until next quarter, so big holders have moved on. Others are sticking with the stock and adding more shares at these lower prices.

It’s hard to say why the stock took such a beating, most likely it’s because CEO Stephen D. Steinour said he still sees headwinds in the U.S. economy and tempered his projections for the rest of 2011. He has become much more conservative in his use of capital. Long term, this is probably very wise, but for the short term the stock is taking a haircut.

Skip to the 3:55 mark to hear Steinour make his comments in the video below:

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