All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
BancorpSouth in Focus
Headquartered in Tupelo, BancorpSouth is a Finance stock that has seen a price change of 10.68% so far this year. The bank is paying out a dividend of $0.19 per share at the moment, with a dividend yield of 2.5% compared to the Banks - Southeast industry's yield of 2.09% and the S&P 500's yield of 1.43%.
Looking at dividend growth, the company's current annualized dividend of $0.76 is up 2% from last year. In the past five-year period, BancorpSouth has increased its dividend 5 times on a year-over-year basis for an average annual increase of 14.35%. 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. BancorpSouth's current payout ratio is 33%. This means it paid out 33% of its trailing 12-month EPS as dividend.
BXS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $2.22 per share, representing a year-over-year earnings growth rate of 4.72%.
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. With that in mind, BXS is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Are You Looking for a High-Growth Dividend Stock? BancorpSouth (BXS) Could Be a Great Choice
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
BancorpSouth in Focus
Headquartered in Tupelo, BancorpSouth is a Finance stock that has seen a price change of 10.68% so far this year. The bank is paying out a dividend of $0.19 per share at the moment, with a dividend yield of 2.5% compared to the Banks - Southeast industry's yield of 2.09% and the S&P 500's yield of 1.43%.
Looking at dividend growth, the company's current annualized dividend of $0.76 is up 2% from last year. In the past five-year period, BancorpSouth has increased its dividend 5 times on a year-over-year basis for an average annual increase of 14.35%. 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. BancorpSouth's current payout ratio is 33%. This means it paid out 33% of its trailing 12-month EPS as dividend.
BXS is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $2.22 per share, representing a year-over-year earnings growth rate of 4.72%.
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. With that in mind, BXS is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).