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Why Bank of Marin (BMRC) is a Top Dividend Stock for Your Portfolio

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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.

Bank of Marin in Focus

Based in Novato, Bank of Marin (BMRC - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -14.88%. Currently paying a dividend of $0.24 per share, the company has a dividend yield of 3.03%. In comparison, the Banks - West industry's yield is 2.6%, while the S&P 500's yield is 1.56%.

In terms of dividend growth, the company's current annualized dividend of $0.96 is up 2.1% from last year. Over the last 5 years, Bank of Marin has increased its dividend 4 times on a year-over-year basis for an average annual increase of 14.18%. 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. Bank of Marin's current payout ratio is 36%, meaning it paid out 36% of its trailing 12-month EPS as dividend.

Earnings growth looks solid for BMRC for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.75 per share, with earnings expected to increase 4.17% from the year ago period.

Bottom Line

Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, BMRC is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).


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