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This is Why Farmers & Merchants Bancorp Inc. (FMAO) 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Farmers & Merchants Bancorp Inc. In Focus
Headquartered in Archbold, Farmers & Merchants Bancorp Inc. (FMAO - Free Report) is a Finance stock that has seen a price change of 8.59% so far this year. The company is currently shelling out a dividend of $0.19 per share, with a dividend yield of 2.13%. This compares to the Banks - Northeast industry's yield of 2.27% and the S&P 500's yield of 1.46%.
Looking at dividend growth, the company's current annualized dividend of $0.76 is up 7% from last year. In the past five-year period, Farmers & Merchants Bancorp Inc. has increased its dividend 5 times on a year-over-year basis for an average annual increase of 8.82%. 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. Farmers & Merchants Bancorp Inc.'s current payout ratio is 34%. This means it paid out 34% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FMAO expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.38 per share, with earnings expected to increase 4.39% 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. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, FMAO presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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This is Why Farmers & Merchants Bancorp Inc. (FMAO) 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Farmers & Merchants Bancorp Inc. In Focus
Headquartered in Archbold, Farmers & Merchants Bancorp Inc. (FMAO - Free Report) is a Finance stock that has seen a price change of 8.59% so far this year. The company is currently shelling out a dividend of $0.19 per share, with a dividend yield of 2.13%. This compares to the Banks - Northeast industry's yield of 2.27% and the S&P 500's yield of 1.46%.
Looking at dividend growth, the company's current annualized dividend of $0.76 is up 7% from last year. In the past five-year period, Farmers & Merchants Bancorp Inc. has increased its dividend 5 times on a year-over-year basis for an average annual increase of 8.82%. 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. Farmers & Merchants Bancorp Inc.'s current payout ratio is 34%. This means it paid out 34% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FMAO expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.38 per share, with earnings expected to increase 4.39% 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. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, FMAO presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).