Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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.
FS Bancorp in Focus
Based in Mountlake Terrace, FS Bancorp (FSBW - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 9.78%. The bank holding company is currently shelling out a dividend of $0.2 per share, with a dividend yield of 2.72%. This compares to the Banks - West industry's yield of 2.46% and the S&P 500's yield of 1.58%.
In terms of dividend growth, the company's current annualized dividend of $1 is up 11.1% from last year. In the past five-year period, FS Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 31.26%. 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. FS Bancorp's current payout ratio is 22%. This means it paid out 22% of its trailing 12-month EPS as dividend.
FSBW is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $4.75 per share, with earnings expected to increase 28.38% 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. That said, they can take comfort from the fact that FSBW is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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.
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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. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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.
FS Bancorp in Focus
Based in Mountlake Terrace, FS Bancorp (FSBW - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 9.78%. The bank holding company is currently shelling out a dividend of $0.2 per share, with a dividend yield of 2.72%. This compares to the Banks - West industry's yield of 2.46% and the S&P 500's yield of 1.58%.
In terms of dividend growth, the company's current annualized dividend of $1 is up 11.1% from last year. In the past five-year period, FS Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 31.26%. 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. FS Bancorp's current payout ratio is 22%. This means it paid out 22% of its trailing 12-month EPS as dividend.
FSBW is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $4.75 per share, with earnings expected to increase 28.38% 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. That said, they can take comfort from the fact that FSBW is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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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