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.
The First of Long Island in Focus
Based in Melville, The First of Long Island (FLIC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -7.55%. The holding company for The First National Bank of Long Island is currently shelling out a dividend of $0.2 per share, with a dividend yield of 4.01%. This compares to the Banks - Northeast industry's yield of 2.35% and the S&P 500's yield of 1.58%.
In terms of dividend growth, the company's current annualized dividend of $0.80 is up 3.9% from last year. The First of Long Island has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 7.45%. 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. The First of Long Island's current payout ratio is 42%, meaning it paid out 42% of its trailing 12-month EPS as dividend.
FLIC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $2.07 per share, with earnings expected to increase 14.36% 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. 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 FLIC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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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. 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.
The First of Long Island in Focus
Based in Melville, The First of Long Island (FLIC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -7.55%. The holding company for The First National Bank of Long Island is currently shelling out a dividend of $0.2 per share, with a dividend yield of 4.01%. This compares to the Banks - Northeast industry's yield of 2.35% and the S&P 500's yield of 1.58%.
In terms of dividend growth, the company's current annualized dividend of $0.80 is up 3.9% from last year. The First of Long Island has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 7.45%. 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. The First of Long Island's current payout ratio is 42%, meaning it paid out 42% of its trailing 12-month EPS as dividend.
FLIC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $2.07 per share, with earnings expected to increase 14.36% 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. 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 FLIC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
Free Report: Must-See Energy Stocks for 2023
Record profits at oil companies can mean big gains for you. With soaring demand and elevated prices, oil stocks could be top performers by far in 2023. Zacks has released a special report revealing the 4 oil stocks experts believe will deliver the biggest gains. (You’ll never guess Stock #2!)
Download Oil Market on Fire today, absolutely free.
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