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Farmers & Merchants Bancorp Inc. (FMAO) is a Top Dividend Stock Right Now: Should You Buy?
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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.
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.
Farmers & Merchants Bancorp Inc. In Focus
Based in Archbold, Farmers & Merchants Bancorp Inc. (FMAO - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -17.12%. The company is paying out a dividend of $0.2 per share at the moment, with a dividend yield of 2.79% compared to the Banks - Northeast industry's yield of 2.49% and the S&P 500's yield of 1.65%.
In terms of dividend growth, the company's current annualized dividend of $0.76 is up 7% from last year. In the past five-year period, Farmers & Merchants Bancorp Inc. has increased its dividend 5 times on a year-over-year basis for an average annual increase of 8.65%. 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, Farmers & Merchants Bancorp Inc.'s payout ratio is 30%, which means it paid out 30% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FMAO expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.64 per share, with earnings expected to increase 15.79% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FMAO 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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Farmers & Merchants Bancorp Inc. (FMAO) is a Top Dividend Stock Right Now: Should You Buy?
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.
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.
Farmers & Merchants Bancorp Inc. In Focus
Based in Archbold, Farmers & Merchants Bancorp Inc. (FMAO - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -17.12%. The company is paying out a dividend of $0.2 per share at the moment, with a dividend yield of 2.79% compared to the Banks - Northeast industry's yield of 2.49% and the S&P 500's yield of 1.65%.
In terms of dividend growth, the company's current annualized dividend of $0.76 is up 7% from last year. In the past five-year period, Farmers & Merchants Bancorp Inc. has increased its dividend 5 times on a year-over-year basis for an average annual increase of 8.65%. 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, Farmers & Merchants Bancorp Inc.'s payout ratio is 30%, which means it paid out 30% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FMAO expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $2.64 per share, with earnings expected to increase 15.79% from the year ago period.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. 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 must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FMAO 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).