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Why Horizon Bancorp (HBNC) is a Top Dividend Stock for Your Portfolio
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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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Horizon Bancorp in Focus
Headquartered in Michigan City, Horizon Bancorp (HBNC - Free Report) is a Finance stock that has seen a price change of -18.75% so far this year. The bank holding company is paying out a dividend of $0.15 per share at the moment, with a dividend yield of 3.54% compared to the Banks - Northeast industry's yield of 2.34% and the S&P 500's yield of 1.65%.
In terms of dividend growth, the company's current annualized dividend of $0.60 is up 13.2% from last year. In the past five-year period, Horizon Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 13.31%. 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, Horizon Bancorp's payout ratio is 28%, which means it paid out 28% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HBNC expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.16 per share, representing a year-over-year earnings growth rate of 8%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. 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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Why Horizon Bancorp (HBNC) is a Top Dividend Stock for Your Portfolio
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Horizon Bancorp in Focus
Headquartered in Michigan City, Horizon Bancorp (HBNC - Free Report) is a Finance stock that has seen a price change of -18.75% so far this year. The bank holding company is paying out a dividend of $0.15 per share at the moment, with a dividend yield of 3.54% compared to the Banks - Northeast industry's yield of 2.34% and the S&P 500's yield of 1.65%.
In terms of dividend growth, the company's current annualized dividend of $0.60 is up 13.2% from last year. In the past five-year period, Horizon Bancorp has increased its dividend 5 times on a year-over-year basis for an average annual increase of 13.31%. 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, Horizon Bancorp's payout ratio is 28%, which means it paid out 28% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HBNC expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.16 per share, representing a year-over-year earnings growth rate of 8%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. However, not all companies offer 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. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. 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).