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Why First Savings Financial (FSFG) is a Great Dividend Stock Right Now
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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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
First Savings Financial in Focus
Based in Jeffersonville, First Savings Financial (FSFG - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 7.14%. The bank holding company is paying out a dividend of $0.14 per share at the moment, with a dividend yield of 3.11% compared to the Financial - Savings and Loan industry's yield of 3.23% and the S&P 500's yield of 1.6%.
In terms of dividend growth, the company's current annualized dividend of $0.56 is up 1.8% from last year. Over the last 5 years, First Savings Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 31.25%. 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. First Savings Financial's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for FSFG for this fiscal year. The Zacks Consensus Estimate for 2024 is $2.15 per share, representing a year-over-year earnings growth rate of 16.22%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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. With that in mind, FSFG 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 First Savings Financial (FSFG) is a Great Dividend Stock Right Now
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.
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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
First Savings Financial in Focus
Based in Jeffersonville, First Savings Financial (FSFG - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 7.14%. The bank holding company is paying out a dividend of $0.14 per share at the moment, with a dividend yield of 3.11% compared to the Financial - Savings and Loan industry's yield of 3.23% and the S&P 500's yield of 1.6%.
In terms of dividend growth, the company's current annualized dividend of $0.56 is up 1.8% from last year. Over the last 5 years, First Savings Financial has increased its dividend 5 times on a year-over-year basis for an average annual increase of 31.25%. 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. First Savings Financial's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for FSFG for this fiscal year. The Zacks Consensus Estimate for 2024 is $2.15 per share, representing a year-over-year earnings growth rate of 16.22%.
Bottom Line
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. 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. With that in mind, FSFG 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).