Dividend Growth Stock Overview: United Bankshares, Inc.

United Bankshares has increased dividends for more than 40 years.
Photo courtesy United Bankshares website.

About United Bankshares, Inc.

United Bankshares, Inc. is a bank holding company with headquarters in Washington, DC and Charleston, WV and over 130 banking offices across Virginia, West Virginia, Washington DC, Maryland, Ohio and Pennsylvania. The company’s history goes back to 1839 when the Northwestern Bank of Virginia opened a branch in Parkersburg, in the western part of Virginia (now West Virginia). In 1869, the bank branch became the Parkersburg National Bank, predecessor to United Bankshares.

In 2014, United Bankshares had earnings of $192.2 million, which corresponded to $1.92 per share. This represented an increase of 12.9% in earnings per share from 2013, when the company earned $1.70. Net earnings more than doubled from $85.6 million in 2013, due primarily to the acquisition of Virginia Commerce Bancorp, which closed on January 31, 2014. The purchase of Virginia Commerce was United Bankshares’ 29th acquisition in 38 years and the largest in United’s history. Prior to the acquisition, Virginia Commerce had assets of nearly $3 billion.

The combined company has assets of $12 billion, is the largest independent banking franchise in the Northern Virginia and DC markets, and is one of the 50 largest banks in the United States.

United Bankshares is a member of the S&P Small Cap 600 index and S&P’s High Yield Dividend Aristocrats index, and trades under the ticker symbol UBSI.

United Bankshares’ Dividend and Stock Split History

United Bankshares Dividend Growth

United Bankshares has increased its dividend less than 2% a year over the last 5 years.

United Bankshares has increased dividends since 1974. While the company had previously increased dividends once a year, since 2007 United Bankshares has increased dividends in the 4th quarter of every other year – announcing them in November with the stock going ex-dividend in mid-December. United Bankshares last increased its dividend in December of 2013. The increase was 3.2% to an annualized rate of $1.28 per share. I expect the next increase to be announced in November 2015.

Because United Bankshares increases dividends on alternate years, the dividend growth since 2007 has been erratic. In addition, dividend increases since 2002 have only been 4 cents a year, resulting in a low dividend growth rate. The company’s 5-year and 10-year compounded annual dividend growth rates (CADGR) are 1.81% and 2.30%, respectively. Longer term, United Bankshares’ dividend growth rates are better – but not great – with 20-year and 25-year CADGRs of 4.51% and 5.70%.

United Bankshares has split its stock twice 2-for-1 since beginning its record of dividend growth in 1977. The most recent split was in March 1998. Prior to that, the company split the stock in January 1988. For each share of UBSI stock that you owned in the early 1980s, you would now have 4 shares of stock.

Over the 5 years ending on December 31, 2014, United Bankshares stock appreciated at an annualized rate of 18.39%, from a split-adjusted $16.10 to $37.45. This outperformed both the 13.0% annualized return of the S&P 500 and the 15.9% annualized return of the S&P Small Cap 600 index during this time.

United Bankshares’ Direct Purchase and Dividend Reinvestment Plans

United Bankshares has both direct purchase and dividend reinvestment plans. You do need to be an existing shareholder to participate in both plans. The fee structure is very favorable for investors, with no initial setup fee and no fees on any purchases, either through direct purchase or dividend reinvestment. The minimum direct purchase amount is $25.

There are fees when selling shares. Specifically, you’ll pay a commission of $15 plus a transaction fee of 12 cents per share. All the fees will be deducted from the proceeds of the sale of the shares.

Helpful Links

United Bankshares’ Investor Relations Website

Current quote and financial summary for United Bankshares, Inc. (finviz.com)

Information on the direct purchase and dividend reinvestment plans for UBSI

Want to find out about more great dividend growth stocks?

Check out the list of current S&P Dividend Aristocrats.

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