All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Heartland Financial in Focus
Headquartered in Dubuque, Heartland Financial (HTLF - Free Report) is a Finance stock that has seen a price change of 7.49% so far this year. Currently paying a dividend of $0.3 per share, the company has a dividend yield of 2.39%. In comparison, the Banks - Midwest industry's yield is 3.01%, while the S&P 500's yield is 1.58%.
In terms of dividend growth, the company's current annualized dividend of $1.20 is up 10.1% from last year. In the past five-year period, Heartland Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 18.91%. 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. Right now, Heartland Financial's payout ratio is 22%, which means it paid out 22% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HTLF for this fiscal year. The Zacks Consensus Estimate for 2023 is $5.41 per share, which represents a year-over-year growth rate of 11.32%.
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.
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. That said, they can take comfort from the fact that HTLF is not only an attractive dividend play, but also represents a compelling investment opportunity with a 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 >>
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Heartland Financial in Focus
Headquartered in Dubuque, Heartland Financial (HTLF - Free Report) is a Finance stock that has seen a price change of 7.49% so far this year. Currently paying a dividend of $0.3 per share, the company has a dividend yield of 2.39%. In comparison, the Banks - Midwest industry's yield is 3.01%, while the S&P 500's yield is 1.58%.
In terms of dividend growth, the company's current annualized dividend of $1.20 is up 10.1% from last year. In the past five-year period, Heartland Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 18.91%. 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. Right now, Heartland Financial's payout ratio is 22%, which means it paid out 22% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HTLF for this fiscal year. The Zacks Consensus Estimate for 2023 is $5.41 per share, which represents a year-over-year growth rate of 11.32%.
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.
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. That said, they can take comfort from the fact that HTLF is not only an attractive dividend play, but also represents a compelling investment opportunity with a 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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