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Why Stock Yards Bancorp (SYBT) is a Great Dividend Stock Right Now
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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.
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.
Stock Yards Bancorp in Focus
Based in Louisville, Stock Yards Bancorp (SYBT - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 6.28%. The holding company for Stock Yards Bank & Trust Co. Is currently shelling out a dividend of $0.25 per share, with a dividend yield of 2.87%. This compares to the Banks - Southeast industry's yield of 1.72% and the S&P 500's yield of 1.94%.
Looking at dividend growth, the company's current annualized dividend of $1 is up 4.2% from last year. Stock Yards Bancorp has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 13%. 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. Stock Yards's current payout ratio is 40%, meaning it paid out 40% of its trailing 12-month EPS as dividend.
SYBT is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $2.57 per share, representing a year-over-year earnings growth rate of 6.20%.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, SYBT 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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Why Stock Yards Bancorp (SYBT) is a Great Dividend Stock Right Now
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.
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.
Stock Yards Bancorp in Focus
Based in Louisville, Stock Yards Bancorp (SYBT - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 6.28%. The holding company for Stock Yards Bank & Trust Co. Is currently shelling out a dividend of $0.25 per share, with a dividend yield of 2.87%. This compares to the Banks - Southeast industry's yield of 1.72% and the S&P 500's yield of 1.94%.
Looking at dividend growth, the company's current annualized dividend of $1 is up 4.2% from last year. Stock Yards Bancorp has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 13%. 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. Stock Yards's current payout ratio is 40%, meaning it paid out 40% of its trailing 12-month EPS as dividend.
SYBT is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2019 is $2.57 per share, representing a year-over-year earnings growth rate of 6.20%.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, SYBT 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).