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Why Essa Bancorp (ESSA) is a Top Dividend Stock for Your Portfolio
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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 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.
Essa Bancorp in Focus
Headquartered in Stroudsburg, Essa Bancorp (ESSA - Free Report) is a Finance stock that has seen a price change of 22.62% so far this year. The bank is paying out a dividend of $0.15 per share at the moment, with a dividend yield of 2.82% compared to the Financial - Savings and Loan industry's yield of 2.58% and the S&P 500's yield of 1.68%.
Looking at dividend growth, the company's current annualized dividend of $0.60 is up 11.1% from last year. Over the last 5 years, Essa Bancorp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 10.05%. 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. Essa Bancorp's current payout ratio is 29%. This means it paid out 29% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for ESSA for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.20 per share, which represents a year-over-year growth rate of 6.80%.
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, ESSA presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).
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Why Essa Bancorp (ESSA) is a Top Dividend Stock for Your Portfolio
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But 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.
Essa Bancorp in Focus
Headquartered in Stroudsburg, Essa Bancorp (ESSA - Free Report) is a Finance stock that has seen a price change of 22.62% so far this year. The bank is paying out a dividend of $0.15 per share at the moment, with a dividend yield of 2.82% compared to the Financial - Savings and Loan industry's yield of 2.58% and the S&P 500's yield of 1.68%.
Looking at dividend growth, the company's current annualized dividend of $0.60 is up 11.1% from last year. Over the last 5 years, Essa Bancorp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 10.05%. 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. Essa Bancorp's current payout ratio is 29%. This means it paid out 29% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for ESSA for this fiscal year. The Zacks Consensus Estimate for 2022 is $2.20 per share, which represents a year-over-year growth rate of 6.80%.
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, ESSA presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).