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Bar Harbor Bankshares (BHB) Could Be a Great Choice
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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. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Bar Harbor Bankshares in Focus
Headquartered in Bar Harbor, Bar Harbor Bankshares (BHB - Free Report) is a Finance stock that has seen a price change of -18.07% so far this year. Currently paying a dividend of $0.26 per share, the company has a dividend yield of 3.96%. In comparison, the Banks - Northeast industry's yield is 3%, while the S&P 500's yield is 1.78%.
Looking at dividend growth, the company's current annualized dividend of $1.04 is up 2% from last year. In the past five-year period, Bar Harbor Bankshares has increased its dividend 4 times on a year-over-year basis for an average annual increase of 6.35%. 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. Bar Harbor's current payout ratio is 36%. This means it paid out 36% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BHB expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $3.03 per share, representing a year-over-year earnings growth rate of 4.84%.
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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, BHB presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).
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Bar Harbor Bankshares (BHB) Could Be a Great Choice
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
Bar Harbor Bankshares in Focus
Headquartered in Bar Harbor, Bar Harbor Bankshares (BHB - Free Report) is a Finance stock that has seen a price change of -18.07% so far this year. Currently paying a dividend of $0.26 per share, the company has a dividend yield of 3.96%. In comparison, the Banks - Northeast industry's yield is 3%, while the S&P 500's yield is 1.78%.
Looking at dividend growth, the company's current annualized dividend of $1.04 is up 2% from last year. In the past five-year period, Bar Harbor Bankshares has increased its dividend 4 times on a year-over-year basis for an average annual increase of 6.35%. 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. Bar Harbor's current payout ratio is 36%. This means it paid out 36% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, BHB expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $3.03 per share, representing a year-over-year earnings growth rate of 4.84%.
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.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. 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, BHB presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #2 (Buy).