Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But 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.
Independent Bank Group in Focus
Based in Mckinney, Independent Bank Group (IBTX - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -5.53%. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 2.23%. In comparison, the Banks - Southeast industry's yield is 2.18%, while the S&P 500's yield is 1.73%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.52 is up 15.2% from last year. Independent Bank Group has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 32.39%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, Independent Bank Group's payout ratio is 30%, which means it paid out 30% of its trailing 12-month EPS as dividend.
IBTX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $5.27 per share, which represents a year-over-year growth rate of 0.57%.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that IBTX is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But 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.
Independent Bank Group in Focus
Based in Mckinney, Independent Bank Group (IBTX - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -5.53%. Currently paying a dividend of $0.38 per share, the company has a dividend yield of 2.23%. In comparison, the Banks - Southeast industry's yield is 2.18%, while the S&P 500's yield is 1.73%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.52 is up 15.2% from last year. Independent Bank Group has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 32.39%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Right now, Independent Bank Group's payout ratio is 30%, which means it paid out 30% of its trailing 12-month EPS as dividend.
IBTX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $5.27 per share, which represents a year-over-year growth rate of 0.57%.
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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that IBTX is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
4 Oil Stocks with Massive Upsides
Global demand for oil is through the roof... and oil producers are struggling to keep up. So even though oil prices are well off their recent highs, you can expect big profits from the companies that supply the world with "black gold."
Zacks Investment Research has just released an urgent special report to help you bank on this trend.
In Oil Market on Fire, you'll discover 4 unexpected oil and gas stocks positioned for big gains in the coming weeks and months. You don't want to miss these recommendations.
Download your free report now to see them.
Get the latest research report on IBTX - FREE