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This is Why Peoples Bancorp (PEBO) is a Great Dividend Stock
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Peoples Bancorp in Focus
Based in Marietta, Peoples Bancorp (PEBO - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -0.6%. Currently paying a dividend of $0.36 per share, the company has a dividend yield of 4.55%. In comparison, the Banks - Midwest industry's yield is 2.34%, while the S&P 500's yield is 1.44%.
Looking at dividend growth, the company's current annualized dividend of $1.44 is up 0.7% from last year. Peoples Bancorp has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 13.45%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Peoples Bancorp's current payout ratio is 46%, meaning it paid out 46% of its trailing 12-month EPS as dividend.
PEBO is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.12 per share, with earnings expected to increase 44.44% 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, PEBO 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 Peoples Bancorp (PEBO) 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. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Peoples Bancorp in Focus
Based in Marietta, Peoples Bancorp (PEBO - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -0.6%. Currently paying a dividend of $0.36 per share, the company has a dividend yield of 4.55%. In comparison, the Banks - Midwest industry's yield is 2.34%, while the S&P 500's yield is 1.44%.
Looking at dividend growth, the company's current annualized dividend of $1.44 is up 0.7% from last year. Peoples Bancorp has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 13.45%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. Peoples Bancorp's current payout ratio is 46%, meaning it paid out 46% of its trailing 12-month EPS as dividend.
PEBO is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $3.12 per share, with earnings expected to increase 44.44% 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, PEBO 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).