Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Bryn Mawr Bank in Focus
Headquartered in Bryn Mawr, Bryn Mawr Bank is a Finance stock that has seen a price change of 28.35% so far this year. Currently paying a dividend of $0.55 per share, the company has a dividend yield of 2.85%. In comparison, the Banks - Northeast industry's yield is 2.02%, while the S&P 500's yield is 1.37%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.12 is up 5.7% from last year. Bryn Mawr Bank has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 6.66%. 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. Bryn Mawr Bank's current payout ratio is 32%, meaning it paid out 32% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BMTC for this fiscal year. The Zacks Consensus Estimate for 2021 is $2.76 per share, with earnings expected to increase 68.29% from the year ago period.
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. But, not every company offers 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, BMTC 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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This is Why Bryn Mawr Bank (BMTC) is a Great Dividend Stock
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Bryn Mawr Bank in Focus
Headquartered in Bryn Mawr, Bryn Mawr Bank is a Finance stock that has seen a price change of 28.35% so far this year. Currently paying a dividend of $0.55 per share, the company has a dividend yield of 2.85%. In comparison, the Banks - Northeast industry's yield is 2.02%, while the S&P 500's yield is 1.37%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.12 is up 5.7% from last year. Bryn Mawr Bank has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 6.66%. 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. Bryn Mawr Bank's current payout ratio is 32%, meaning it paid out 32% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for BMTC for this fiscal year. The Zacks Consensus Estimate for 2021 is $2.76 per share, with earnings expected to increase 68.29% from the year ago period.
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. But, not every company offers 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, BMTC 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).