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Are You Looking for a High-Growth Dividend Stock? Horizon Bancorp (HBNC) Could Be a Great Choice
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Horizon Bancorp in Focus
Headquartered in Michigan City, Horizon Bancorp (HBNC - Free Report) is a Finance stock that has seen a price change of -7.58% so far this year. Currently paying a dividend of $0.15 per share, the company has a dividend yield of 3.11%. In comparison, the Banks - Northeast industry's yield is 2.24%, while the S&P 500's yield is 1.46%.
In terms of dividend growth, the company's current annualized dividend of $0.60 is up 13.2% from last year. In the past five-year period, Horizon Bancorp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 13.74%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Horizon Bancorp's current payout ratio is 30%. This means it paid out 30% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HBNC for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.08 per share, which represents a year-over-year growth rate of 4%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, HBNC is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Are You Looking for a High-Growth Dividend Stock? Horizon Bancorp (HBNC) Could Be a Great Choice
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Horizon Bancorp in Focus
Headquartered in Michigan City, Horizon Bancorp (HBNC - Free Report) is a Finance stock that has seen a price change of -7.58% so far this year. Currently paying a dividend of $0.15 per share, the company has a dividend yield of 3.11%. In comparison, the Banks - Northeast industry's yield is 2.24%, while the S&P 500's yield is 1.46%.
In terms of dividend growth, the company's current annualized dividend of $0.60 is up 13.2% from last year. In the past five-year period, Horizon Bancorp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 13.74%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Horizon Bancorp's current payout ratio is 30%. This means it paid out 30% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HBNC for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.08 per share, which represents a year-over-year growth rate of 4%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, HBNC is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).