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Are You Looking for a High-Growth Dividend Stock? Bank of Marin (BMRC) Could Be a Great Choice

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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. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.

Bank of Marin in Focus

Based in Novato, Bank of Marin (BMRC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -5.91%. The bank holding company is currently shelling out a dividend of $0.24 per share, with a dividend yield of 2.74%. This compares to the Banks - West industry's yield of 2.19% and the S&P 500's yield of 1.43%.

Looking at dividend growth, the company's current annualized dividend of $0.96 is up 2.1% from last year. In the past five-year period, Bank of Marin has increased its dividend 5 times on a year-over-year basis for an average annual increase of 15.03%. 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. Bank of Marin's current payout ratio is 36%. This means it paid out 36% of its trailing 12-month EPS as dividend.

Looking at this fiscal year, BMRC expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.68 per share, which represents a year-over-year growth rate of 1.52%.

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. 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. That said, they can take comfort from the fact that BMRC 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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