Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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.
Investors Bancorp in Focus
Investors Bancorp is headquartered in Short Hills, and is in the Finance sector. The stock has seen a price change of 26.33% since the start of the year. The holding company for Investors Bank is currently shelling out a dividend of $0.14 per share, with a dividend yield of 4.2%. This compares to the Financial - Savings and Loan industry's yield of 2.49% and the S&P 500's yield of 1.48%.
In terms of dividend growth, the company's current annualized dividend of $0.56 is up 16.7% from last year. In the past five-year period, Investors Bancorp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 16.52%. 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. Investors Bancorp's current payout ratio is 51%, meaning it paid out 51% of its trailing 12-month EPS as dividend.
ISBC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $1.16 per share, with earnings expected to increase 23.40% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers 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 ISBC is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Are You Looking for a High-Growth Dividend Stock? Investors Bancorp (ISBC) Could Be a Great Choice
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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.
Investors Bancorp in Focus
Investors Bancorp is headquartered in Short Hills, and is in the Finance sector. The stock has seen a price change of 26.33% since the start of the year. The holding company for Investors Bank is currently shelling out a dividend of $0.14 per share, with a dividend yield of 4.2%. This compares to the Financial - Savings and Loan industry's yield of 2.49% and the S&P 500's yield of 1.48%.
In terms of dividend growth, the company's current annualized dividend of $0.56 is up 16.7% from last year. In the past five-year period, Investors Bancorp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 16.52%. 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. Investors Bancorp's current payout ratio is 51%, meaning it paid out 51% of its trailing 12-month EPS as dividend.
ISBC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $1.16 per share, with earnings expected to increase 23.40% from the year ago period.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. But, not every company offers 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 ISBC is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).