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Bar Harbor Bankshares (BHB) Could Be a Great Choice
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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.
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 -17.04% so far this year. The bank is paying out a dividend of $0.28 per share at the moment, with a dividend yield of 4.21% compared to the Banks - Northeast industry's yield of 3.2% and the S&P 500's yield of 1.72%.
In terms of dividend growth, the company's current annualized dividend of $1.12 is up 9.8% from last year. Bar Harbor Bankshares has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 6.06%. 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, Bar Harbor's payout ratio is 33%, which means it paid out 33% of its trailing 12-month EPS as dividend.
BHB is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $2.99 per share, representing a year-over-year earnings growth rate of 3.46%.
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.
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. That said, they can take comfort from the fact that BHB is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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Bar Harbor Bankshares (BHB) Could Be a Great Choice
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. 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.
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 -17.04% so far this year. The bank is paying out a dividend of $0.28 per share at the moment, with a dividend yield of 4.21% compared to the Banks - Northeast industry's yield of 3.2% and the S&P 500's yield of 1.72%.
In terms of dividend growth, the company's current annualized dividend of $1.12 is up 9.8% from last year. Bar Harbor Bankshares has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 6.06%. 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, Bar Harbor's payout ratio is 33%, which means it paid out 33% of its trailing 12-month EPS as dividend.
BHB is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2023 is $2.99 per share, representing a year-over-year earnings growth rate of 3.46%.
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.
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. That said, they can take comfort from the fact that BHB is not only an attractive dividend play, but also represents a compelling investment opportunity with a Zacks Rank of #2 (Buy).