Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 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.
First Guaranty Bancshares in Focus
Headquartered in Hammond, First Guaranty Bancshares (FGBI - Free Report) is a Finance stock that has seen a price change of 31.84% so far this year. Currently paying a dividend of $0.16 per share, the company has a dividend yield of 2.38%. In comparison, the Banks - Southeast industry's yield is 2.09%, while the S&P 500's yield is 1.53%.
Looking at dividend growth, the company's current annualized dividend of $0.64 is up 7.4% from last year. First Guaranty Bancshares has increased its dividend 2 times on a year-over-year basis over the last 5 years for an average annual increase of 2.09%. 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 Guaranty Bancshares's current payout ratio is 25%, meaning it paid out 25% of its trailing 12-month EPS as dividend.
FGBI is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $2.70 per share, with earnings expected to increase 11.57% from the year ago period.
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. 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, FGBI 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).
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
>>Send me my free report on the top 5 EV stocks<<
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 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.
First Guaranty Bancshares in Focus
Headquartered in Hammond, First Guaranty Bancshares (FGBI - Free Report) is a Finance stock that has seen a price change of 31.84% so far this year. Currently paying a dividend of $0.16 per share, the company has a dividend yield of 2.38%. In comparison, the Banks - Southeast industry's yield is 2.09%, while the S&P 500's yield is 1.53%.
Looking at dividend growth, the company's current annualized dividend of $0.64 is up 7.4% from last year. First Guaranty Bancshares has increased its dividend 2 times on a year-over-year basis over the last 5 years for an average annual increase of 2.09%. 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 Guaranty Bancshares's current payout ratio is 25%, meaning it paid out 25% of its trailing 12-month EPS as dividend.
FGBI is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $2.70 per share, with earnings expected to increase 11.57% from the year ago period.
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. 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, FGBI 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).
Free Report Reveals How You Could Profit from the Growing Electric Vehicle Industry
Globally, electric car sales continue their remarkable growth even after breaking records in 2021. High gas prices have fueled his demand, but so has evolving EV comfort, features and technology. So, the fervor for EVs will be around long after gas prices normalize. Not only are manufacturers seeing record-high profits, but producers of EV-related technology are raking in the dough as well. Do you know how to cash in? If not, we have the perfect report for you – and it’s FREE! Today, don't miss your chance to download Zacks' top 5 stocks for the electric vehicle revolution at no cost and with no obligation.
>>Send me my free report on the top 5 EV stocks<<
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