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Why Chemung Financial (CHMG) is a Great Dividend Stock Right Now
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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. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Chemung Financial in Focus
Based in Elmira, Chemung Financial (CHMG - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -6.61%. The financial holding company is paying out a dividend of $0.31 per share at the moment, with a dividend yield of 2.86% compared to the Banks - Southeast industry's yield of 2.22% and the S&P 500's yield of 1.68%.
In terms of dividend growth, the company's current annualized dividend of $1.24 is up 4.2% from last year. In the past five-year period, Chemung Financial has increased its dividend 1 times on a year-over-year basis for an average annual increase of 4.05%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Chemung Financial's current payout ratio is 21%, meaning it paid out 21% of its trailing 12-month EPS as dividend.
CHMG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $5.91 per share, with earnings expected to increase 4.79% 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 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 CHMG is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).
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Why Chemung Financial (CHMG) is a Great Dividend Stock Right Now
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Chemung Financial in Focus
Based in Elmira, Chemung Financial (CHMG - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -6.61%. The financial holding company is paying out a dividend of $0.31 per share at the moment, with a dividend yield of 2.86% compared to the Banks - Southeast industry's yield of 2.22% and the S&P 500's yield of 1.68%.
In terms of dividend growth, the company's current annualized dividend of $1.24 is up 4.2% from last year. In the past five-year period, Chemung Financial has increased its dividend 1 times on a year-over-year basis for an average annual increase of 4.05%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Chemung Financial's current payout ratio is 21%, meaning it paid out 21% of its trailing 12-month EPS as dividend.
CHMG is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2022 is $5.91 per share, with earnings expected to increase 4.79% 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 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 CHMG is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #1 (Strong Buy).