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 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.
First Midwest Bancorp in Focus
Based in Chicago, First Midwest Bancorp is in the Finance sector, and so far this year, shares have seen a price change of 13.28%. The holding company for First Midwest Bank is paying out a dividend of $0.12 per share at the moment, with a dividend yield of 2.14% compared to the Banks - Midwest industry's yield of 2.36% and the S&P 500's yield of 1.98%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.48 is up 6.7% from last year. First Midwest Bancorp has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 8.59%. 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. First Midwest Bancorp's current payout ratio is 29%, meaning it paid out 29% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FMBI expects solid earnings growth. The Zacks Consensus Estimate for 2019 is $1.99 per share, with earnings expected to increase 19.16% from the year ago period.
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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FMBI 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? First Midwest Bancorp (FMBI) Could Be a Great Choice
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 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.
First Midwest Bancorp in Focus
Based in Chicago, First Midwest Bancorp is in the Finance sector, and so far this year, shares have seen a price change of 13.28%. The holding company for First Midwest Bank is paying out a dividend of $0.12 per share at the moment, with a dividend yield of 2.14% compared to the Banks - Midwest industry's yield of 2.36% and the S&P 500's yield of 1.98%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.48 is up 6.7% from last year. First Midwest Bancorp has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 8.59%. 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. First Midwest Bancorp's current payout ratio is 29%, meaning it paid out 29% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FMBI expects solid earnings growth. The Zacks Consensus Estimate for 2019 is $1.99 per share, with earnings expected to increase 19.16% from the year ago period.
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.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FMBI 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).