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Why OceanFirst Financial (OCFC) 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.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
OceanFirst Financial in Focus
Headquartered in Red Bank, OceanFirst Financial (OCFC - Free Report) is a Finance stock that has seen a price change of -23.44% so far this year. Currently paying a dividend of $0.2 per share, the company has a dividend yield of 4.92%. In comparison, the Financial - Savings and Loan industry's yield is 3.2%, while the S&P 500's yield is 1.71%.
Looking at dividend growth, the company's current annualized dividend of $0.80 is up 8.1% from last year. In the past five-year period, OceanFirst Financial has increased its dividend 2 times on a year-over-year basis for an average annual increase of 3.92%. 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. OceanFirst's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, OCFC expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $2.66 per share, with earnings expected to increase 13.68% 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, OCFC 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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Why OceanFirst Financial (OCFC) 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.
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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
OceanFirst Financial in Focus
Headquartered in Red Bank, OceanFirst Financial (OCFC - Free Report) is a Finance stock that has seen a price change of -23.44% so far this year. Currently paying a dividend of $0.2 per share, the company has a dividend yield of 4.92%. In comparison, the Financial - Savings and Loan industry's yield is 3.2%, while the S&P 500's yield is 1.71%.
Looking at dividend growth, the company's current annualized dividend of $0.80 is up 8.1% from last year. In the past five-year period, OceanFirst Financial has increased its dividend 2 times on a year-over-year basis for an average annual increase of 3.92%. 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. OceanFirst's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, OCFC expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $2.66 per share, with earnings expected to increase 13.68% 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, OCFC 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).