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This is Why Horizon Bancorp (HBNC) 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. 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 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.
Horizon Bancorp in Focus
Based in Michigan City, Horizon Bancorp (HBNC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -9.4%. The bank holding company is paying out a dividend of $0.15 per share at the moment, with a dividend yield of 3.18% compared to the Banks - Northeast industry's yield of 2.24% and the S&P 500's yield of 1.45%.
In terms of dividend growth, the company's current annualized dividend of $0.60 is up 13.2% from last year. Horizon Bancorp has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 13.74%. 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. Horizon Bancorp's current payout ratio is 30%, meaning it paid out 30% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HBNC for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.09 per share, which represents a year-over-year growth rate of 4.50%.
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. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that HBNC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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This is Why Horizon Bancorp (HBNC) 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 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.
Horizon Bancorp in Focus
Based in Michigan City, Horizon Bancorp (HBNC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -9.4%. The bank holding company is paying out a dividend of $0.15 per share at the moment, with a dividend yield of 3.18% compared to the Banks - Northeast industry's yield of 2.24% and the S&P 500's yield of 1.45%.
In terms of dividend growth, the company's current annualized dividend of $0.60 is up 13.2% from last year. Horizon Bancorp has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 13.74%. 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. Horizon Bancorp's current payout ratio is 30%, meaning it paid out 30% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for HBNC for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.09 per share, which represents a year-over-year growth rate of 4.50%.
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. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers their shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that HBNC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).