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First Financial Bankshares (FFIN) is a Top Dividend Stock Right Now: Should You Buy?
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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. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
First Financial Bankshares in Focus
Based in Abilene, First Financial Bankshares (FFIN - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -0.96%. The commercial banker operating mostly in Texas is paying out a dividend of $0.18 per share at the moment, with a dividend yield of 2.4% compared to the Banks - Southwest industry's yield of 0.95% and the S&P 500's yield of 1.61%.
In terms of dividend growth, the company's current annualized dividend of $0.72 is up 1.4% from last year. Over the last 5 years, First Financial Bankshares has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.95%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. First Financial's current payout ratio is 51%. This means it paid out 51% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FFIN expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $1.45 per share, with earnings expected to increase 4.32% 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. However, not all companies offer 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that FFIN is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).
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First Financial Bankshares (FFIN) is a Top Dividend Stock Right Now: Should You Buy?
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. 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 make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
First Financial Bankshares in Focus
Based in Abilene, First Financial Bankshares (FFIN - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -0.96%. The commercial banker operating mostly in Texas is paying out a dividend of $0.18 per share at the moment, with a dividend yield of 2.4% compared to the Banks - Southwest industry's yield of 0.95% and the S&P 500's yield of 1.61%.
In terms of dividend growth, the company's current annualized dividend of $0.72 is up 1.4% from last year. Over the last 5 years, First Financial Bankshares has increased its dividend 5 times on a year-over-year basis for an average annual increase of 10.95%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. First Financial's current payout ratio is 51%. This means it paid out 51% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, FFIN expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $1.45 per share, with earnings expected to increase 4.32% 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. However, not all companies offer 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. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. That said, they can take comfort from the fact that FFIN is not only an attractive dividend play, but is also a compelling investment opportunity with a Zacks Rank of #2 (Buy).