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Are You Looking for a High-Growth Dividend Stock? Preferred Bank (PFBC) Could Be a Great Choice
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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. 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.
Preferred Bank in Focus
Preferred Bank (PFBC - Free Report) is headquartered in Los Angeles, and is in the Finance sector. The stock has seen a price change of -4.07% since the start of the year. The independent commercial bank is currently shelling out a dividend of $0.43 per share, with a dividend yield of 2.5%. This compares to the Banks - West industry's yield of 2.5% and the S&P 500's yield of 1.47%.
Looking at dividend growth, the company's current annualized dividend of $1.72 is up 19.4% from last year. Preferred Bank has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 16.41%. 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. Right now, Preferred Bank's payout ratio is 26%, which means it paid out 26% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, PFBC expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $7.41 per share, representing a year-over-year earnings growth rate of 15.60%.
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.
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. That said, they can take comfort from the fact that PFBC 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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Are You Looking for a High-Growth Dividend Stock? Preferred Bank (PFBC) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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.
Preferred Bank in Focus
Preferred Bank (PFBC - Free Report) is headquartered in Los Angeles, and is in the Finance sector. The stock has seen a price change of -4.07% since the start of the year. The independent commercial bank is currently shelling out a dividend of $0.43 per share, with a dividend yield of 2.5%. This compares to the Banks - West industry's yield of 2.5% and the S&P 500's yield of 1.47%.
Looking at dividend growth, the company's current annualized dividend of $1.72 is up 19.4% from last year. Preferred Bank has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 16.41%. 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. Right now, Preferred Bank's payout ratio is 26%, which means it paid out 26% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, PFBC expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $7.41 per share, representing a year-over-year earnings growth rate of 15.60%.
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.
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. That said, they can take comfort from the fact that PFBC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).