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This is Why Hilltop Holdings (HTH) is a Great Dividend Stock
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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.
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.
Hilltop Holdings in Focus
Based in Dallas, Hilltop Holdings (HTH - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -0.67%. The insurance holding compnay is paying out a dividend of $0.16 per share at the moment, with a dividend yield of 2.15% compared to the Banks - Southeast industry's yield of 2.74% and the S&P 500's yield of 1.75%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.64 is up 6.7% from last year. Over the last 5 years, Hilltop Holdings has increased its dividend 5 times on a year-over-year basis for an average annual increase of 21.22%. 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. Hilltop Holdings's current payout ratio is 37%. This means it paid out 37% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HTH expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $1.67 per share, which represents a year-over-year growth rate of 4.38%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, HTH 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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This is Why Hilltop Holdings (HTH) is a Great Dividend Stock
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.
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.
Hilltop Holdings in Focus
Based in Dallas, Hilltop Holdings (HTH - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -0.67%. The insurance holding compnay is paying out a dividend of $0.16 per share at the moment, with a dividend yield of 2.15% compared to the Banks - Southeast industry's yield of 2.74% and the S&P 500's yield of 1.75%.
Taking a look at the company's dividend growth, its current annualized dividend of $0.64 is up 6.7% from last year. Over the last 5 years, Hilltop Holdings has increased its dividend 5 times on a year-over-year basis for an average annual increase of 21.22%. 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. Hilltop Holdings's current payout ratio is 37%. This means it paid out 37% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, HTH expects solid earnings growth. The Zacks Consensus Estimate for 2023 is $1.67 per share, which represents a year-over-year growth rate of 4.38%.
Bottom Line
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. It's important to keep in mind that not all companies provide a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, HTH 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).