Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
Investors Bancorp in Focus
Based in Short Hills, Investors Bancorp is in the Finance sector, and so far this year, shares have seen a price change of 36.55%. The holding company for Investors Bank is paying out a dividend of $0.14 per share at the moment, with a dividend yield of 3.88% compared to the Financial - Savings and Loan industry's yield of 2.44% and the S&P 500's yield of 1.35%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.56 is up 16.7% from last year. Investors Bancorp has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 15.19%. 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 45%, meaning it paid out 45% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for ISBC for this fiscal year. The Zacks Consensus Estimate for 2021 is $1.25 per share, with earnings expected to increase 32.98% from the year ago period.
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.
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, ISBC 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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Investors Bancorp (ISBC) is a Top Dividend Stock Right Now: Should You Buy?
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
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.
Investors Bancorp in Focus
Based in Short Hills, Investors Bancorp is in the Finance sector, and so far this year, shares have seen a price change of 36.55%. The holding company for Investors Bank is paying out a dividend of $0.14 per share at the moment, with a dividend yield of 3.88% compared to the Financial - Savings and Loan industry's yield of 2.44% and the S&P 500's yield of 1.35%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.56 is up 16.7% from last year. Investors Bancorp has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 15.19%. 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 45%, meaning it paid out 45% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for ISBC for this fiscal year. The Zacks Consensus Estimate for 2021 is $1.25 per share, with earnings expected to increase 32.98% from the year ago period.
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.
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, ISBC 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).