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Great Southern Bancorp (GSBC) Could Be a Great Choice
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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.
Great Southern Bancorp in Focus
Great Southern Bancorp (GSBC - Free Report) is headquartered in Springfield, and is in the Finance sector. The stock has seen a price change of -1.68% since the start of the year. Currently paying a dividend of $0.4 per share, the company has a dividend yield of 2.74%. In comparison, the Financial - Savings and Loan industry's yield is 2.74%, while the S&P 500's yield is 1.63%.
In terms of dividend growth, the company's current annualized dividend of $1.60 is up 2.6% from last year. In the past five-year period, Great Southern Bancorp has increased its dividend 4 times on a year-over-year basis for an average annual increase of 6.22%. 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, Great Southern Bancorp's payout ratio is 30%, which means it paid out 30% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for GSBC for this fiscal year. The Zacks Consensus Estimate for 2023 is $6.58 per share, with earnings expected to increase 9.30% from the year ago period.
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.
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. That said, they can take comfort from the fact that GSBC is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).