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This is Why Lakeland Financial (LKFN) is a Great Dividend Stock
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Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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.
Lakeland Financial in Focus
Lakeland Financial (LKFN - Free Report) is headquartered in Warsaw, and is in the Finance sector. The stock has seen a price change of -8.57% since the start of the year. The holding company for Lake City Bank is currently shelling out a dividend of $0.8 per share, with a dividend yield of 2.18%. This compares to the Banks - Midwest industry's yield of 2.59% and the S&P 500's yield of 1.5%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.60 is up 17.6% from last year. In the past five-year period, Lakeland Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 14.67%. 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. Right now, Lakeland Financial's payout ratio is 36%, which means it paid out 36% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, LKFN expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $3.86 per share, which represents a year-over-year growth rate of 3.21%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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. 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 LKFN 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 Lakeland Financial (LKFN) is a Great Dividend Stock
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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.
Lakeland Financial in Focus
Lakeland Financial (LKFN - Free Report) is headquartered in Warsaw, and is in the Finance sector. The stock has seen a price change of -8.57% since the start of the year. The holding company for Lake City Bank is currently shelling out a dividend of $0.8 per share, with a dividend yield of 2.18%. This compares to the Banks - Midwest industry's yield of 2.59% and the S&P 500's yield of 1.5%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.60 is up 17.6% from last year. In the past five-year period, Lakeland Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 14.67%. 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. Right now, Lakeland Financial's payout ratio is 36%, which means it paid out 36% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, LKFN expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $3.86 per share, which represents a year-over-year growth rate of 3.21%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide 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. 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 LKFN is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).