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Why Summit Financial (SMMF) is a Great Dividend Stock Right Now
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
Summit Financial in Focus
Summit Financial (SMMF - Free Report) is headquartered in Moorefield, and is in the Finance sector. The stock has seen a price change of -2.04% since the start of the year. The financial holding company is paying out a dividend of $0.18 per share at the moment, with a dividend yield of 2.68% compared to the Banks - Southeast industry's yield of 2.1% and the S&P 500's yield of 1.58%.
Looking at dividend growth, the company's current annualized dividend of $0.72 is up 2.9% from last year. Over the last 5 years, Summit Financial has increased its dividend 4 times on a year-over-year basis for an average annual increase of 11.66%. 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. Summit Financial's current payout ratio is 20%, meaning it paid out 20% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for SMMF for this fiscal year. The Zacks Consensus Estimate for 2022 is $3.89 per share, which represents a year-over-year growth rate of 12.10%.
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. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, SMMF 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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Why Summit Financial (SMMF) is a Great Dividend Stock Right Now
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the 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.
Summit Financial in Focus
Summit Financial (SMMF - Free Report) is headquartered in Moorefield, and is in the Finance sector. The stock has seen a price change of -2.04% since the start of the year. The financial holding company is paying out a dividend of $0.18 per share at the moment, with a dividend yield of 2.68% compared to the Banks - Southeast industry's yield of 2.1% and the S&P 500's yield of 1.58%.
Looking at dividend growth, the company's current annualized dividend of $0.72 is up 2.9% from last year. Over the last 5 years, Summit Financial has increased its dividend 4 times on a year-over-year basis for an average annual increase of 11.66%. 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. Summit Financial's current payout ratio is 20%, meaning it paid out 20% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for SMMF for this fiscal year. The Zacks Consensus Estimate for 2022 is $3.89 per share, which represents a year-over-year growth rate of 12.10%.
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. 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, SMMF 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).