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Is Middlefield Banc (MBCN) a Good Pick for Income Investors?
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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
Middlefield Banc in Focus
Based in Middlefiled, Middlefield Banc (MBCN - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 4.67%. The company is currently shelling out a dividend of $0.28 per share, with a dividend yield of 2.22%. This compares to the Banks - Northeast industry's yield of 1.59% and the S&P 500's yield of 1.83%.
Looking at dividend growth, the company's current annualized dividend of $1.12 is up 3.7% from last year. Over the last 5 years, Middlefield Banc has increased its dividend 2 times on a year-over-year basis for an average annual increase of 1.25%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Middlefield Banc's current payout ratio is 35%. This means it paid out 35% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MBCN expects solid earnings growth. The Zacks Consensus Estimate for 2018 is $3.70 per share, which represents a year-over-year growth rate of 13.15%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that MBCN is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Is Middlefield Banc (MBCN) a Good Pick for Income Investors?
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
Middlefield Banc in Focus
Based in Middlefiled, Middlefield Banc (MBCN - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 4.67%. The company is currently shelling out a dividend of $0.28 per share, with a dividend yield of 2.22%. This compares to the Banks - Northeast industry's yield of 1.59% and the S&P 500's yield of 1.83%.
Looking at dividend growth, the company's current annualized dividend of $1.12 is up 3.7% from last year. Over the last 5 years, Middlefield Banc has increased its dividend 2 times on a year-over-year basis for an average annual increase of 1.25%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Middlefield Banc's current payout ratio is 35%. This means it paid out 35% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MBCN expects solid earnings growth. The Zacks Consensus Estimate for 2018 is $3.70 per share, which represents a year-over-year growth rate of 13.15%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. That said, they can take comfort from the fact that MBCN is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).