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Are You Looking for a High-Growth Dividend Stock? Salisbury Bancorp (SAL) Could Be a Great Choice

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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.

Salisbury Bancorp in Focus

Salisbury Bancorp (SAL - Free Report) is headquartered in Lakeville, and is in the Finance sector. The stock has seen a price change of 22.38% since the start of the year. The bank holding company is paying out a dividend of $0.29 per share at the moment, with a dividend yield of 2.63% compared to the Banks - Northeast industry's yield of 1.94% and the S&P 500's yield of 1.3%.

In terms of dividend growth, the company's current annualized dividend of $1.20 is up 3.4% from last year. Salisbury Bancorp has increased its dividend 1 times on a year-over-year basis over the last 5 years for an average annual increase of 0.79%. 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. Salisbury Bancorp's current payout ratio is 23%. This means it paid out 23% of its trailing 12-month EPS as dividend.

SAL is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $5.45 per share, which represents a year-over-year growth rate of 29.76%.

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. 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, SAL 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).


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