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.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
The First of Long Island in Focus
Headquartered in Melville, The First of Long Island (FLIC - Free Report) is a Finance stock that has seen a price change of -14.08% so far this year. The holding company for The First National Bank of Long Island is paying out a dividend of $0.2 per share at the moment, with a dividend yield of 4.31% compared to the Banks - Northeast industry's yield of 2.37% and the S&P 500's yield of 1.74%.
Looking at 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%. 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. The First of Long Island's current payout ratio is 42%. This means 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. It's important to keep in mind that not all companies provide 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, FLIC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
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.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
The First of Long Island in Focus
Headquartered in Melville, The First of Long Island (FLIC - Free Report) is a Finance stock that has seen a price change of -14.08% so far this year. The holding company for The First National Bank of Long Island is paying out a dividend of $0.2 per share at the moment, with a dividend yield of 4.31% compared to the Banks - Northeast industry's yield of 2.37% and the S&P 500's yield of 1.74%.
Looking at 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%. 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. The First of Long Island's current payout ratio is 42%. This means 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. It's important to keep in mind that not all companies provide 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, FLIC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
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