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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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
Independent Bank Group in Focus
Independent Bank Group (IBTX - Free Report) is headquartered in Mckinney, and is in the Finance sector. The stock has seen a price change of -8.19% since the start of the year. The bank holding company is currently shelling out a dividend of $0.38 per share, with a dividend yield of 2.29%. This compares to the Banks - Southeast industry's yield of 2.15% and the S&P 500's yield of 1.69%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.52 is up 15.2% from last year. Independent Bank Group has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 32.39%. 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. Independent Bank Group's current payout ratio is 30%. This means it paid out 30% of its trailing 12-month EPS as dividend.
IBTX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $5.25 per share, representing a year-over-year earnings growth rate of 0.19%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. With that in mind, IBTX 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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Are You Looking for a High-Growth 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.
Cash flow can come from bond interest, interest from other types of investments, and of course, 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.
Independent Bank Group in Focus
Independent Bank Group (IBTX - Free Report) is headquartered in Mckinney, and is in the Finance sector. The stock has seen a price change of -8.19% since the start of the year. The bank holding company is currently shelling out a dividend of $0.38 per share, with a dividend yield of 2.29%. This compares to the Banks - Southeast industry's yield of 2.15% and the S&P 500's yield of 1.69%.
Taking a look at the company's dividend growth, its current annualized dividend of $1.52 is up 15.2% from last year. Independent Bank Group has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 32.39%. 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. Independent Bank Group's current payout ratio is 30%. This means it paid out 30% of its trailing 12-month EPS as dividend.
IBTX is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $5.25 per share, representing a year-over-year earnings growth rate of 0.19%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. 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. With that in mind, IBTX 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).