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Independent Bank (INDB) Announces 6% Sequential Dividend Hike

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Independent Bank Corp. (INDB - Free Report) cheered investors with a 6.25% sequential dividend hike. The company will now pay a dividend of 51 cents per share, up from 48 cents paid out in the prior quarter.  

The dividend will be paid out on Apr 8, 2022, to shareholders of record as of Mar 28, 2022.

Management remained confident in its core fundamentals and prospects, and is leveraging its “financial stability to support a 6% dividend increase for our shareholders.”

Based on last day’s closing price of $86.52, INDB’s dividend yield currently stands at 2.36%, comparing favorably with the industry’s yield of 1.96%. This yield is not just attractive for income investors, as it represents a steady income stream.

Prior to this, INDB hiked its dividend by 4.3% in March 2021.

Dividend aside, the company has a $140-million share buyback plan in place, which is valid up to Jan 18, 2023.

Markedly, Independent Bank has witnessed earnings growth of 8.3% in the past three to five years. While the company’s earnings are projected to decline 9.3% for 2022, the same is expected to witness growth of 8.7% for 2023.

Also, the company’s earnings were impressive and beat the Zacks Consensus Estimate in all four trailing four quarters, with an average beat of 24.29%.

The company’s organic growth trajectory looks impressive. Revenues witnessed a compound annual growth rate (CAGR) of 10.4% over the past five years (2017-2021). Over the same period, total loans witnessed a CAGR of 20.9%, while deposits witnessed a CAGR of 25.9%. Continued increases in loans and deposits, along with solid economic growth and interest rate hikes, are expected to further support the top line. INDB’s 2022 revenues are projected to grow 31.6%, whereas 2023 revenues will likely grow 6.5%.

Hence, the company’s capital deployment plan looks sustainable, given its solid balance sheet position and earnings strength.

Over the past six months, shares of INDB have gained 21.4%, outperforming 18.4% growth of the industry it belongs to.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Independent Bank currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Finance Stocks That Took Similar Steps

Over the past few months, several finance companies have rewarded their shareholders with dividend hikes. Some of these are Northrim BanCorp (NRIM - Free Report) , Farmers National Banc Corp. (FMNB - Free Report) and Synovus Financial (SNV - Free Report) .

Northrim approved a regular quarterly cash dividend of 41 cents per share, up 7.9% from its prior payout.

The dividend will be paid out on Mar 18 to its shareholders of record as of Mar 10, 2022. Prior to this, NRIM hiked its dividend in August 2021 by 2.7% to 38 cents.

Farmers National announced a dividend of 16 cents per share, representing a 14.3% sequential rise. The dividend will be paid out on Mar 31 to its shareholders of record as of Mar 11, 2022.

The recent dividend hike marks the 7th consecutive quarter of an increase by Farmers National. Before this, FMNB hiked its dividend by 27% to 14 cents per share.

Synovushiked its quarterly dividend 3% from the prior-quarter payout to 34 cents per share. The new dividend will be paid out on Apr 1 to its shareholders of record as of Mar 17, 2022.

Since March 2014, Synovus has raised its dividend eight times. Its dividend was last hiked in January 2020 by 10% to 33 cents per share. This reflects SNV’s commitment to return shareholders’ funds with its strong cash generation capabilities.