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Why Independent Bank (IBCP) is a Great Dividend Stock Right Now
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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 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 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Independent Bank in Focus
Headquartered in Grand Rapids, Independent Bank (IBCP - Free Report) is a Finance stock that has seen a price change of 0.77% so far this year. Currently paying a dividend of $0.24 per share, the company has a dividend yield of 3.66%. In comparison, the Banks - Midwest industry's yield is 3.36%, while the S&P 500's yield is 1.58%.
In terms of dividend growth, the company's current annualized dividend of $0.96 is up 4.3% from last year. Over the last 5 years, Independent Bank has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.74%. 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. Independent Bank's current payout ratio is 31%. This means it paid out 31% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, IBCP expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $2.95 per share, with earnings expected to increase 0.68% from the year ago period.
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. With that in mind, IBCP 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 Independent Bank (IBCP) is a Great Dividend Stock Right Now
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But 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 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 account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Independent Bank in Focus
Headquartered in Grand Rapids, Independent Bank (IBCP - Free Report) is a Finance stock that has seen a price change of 0.77% so far this year. Currently paying a dividend of $0.24 per share, the company has a dividend yield of 3.66%. In comparison, the Banks - Midwest industry's yield is 3.36%, while the S&P 500's yield is 1.58%.
In terms of dividend growth, the company's current annualized dividend of $0.96 is up 4.3% from last year. Over the last 5 years, Independent Bank has increased its dividend 5 times on a year-over-year basis for an average annual increase of 5.74%. 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. Independent Bank's current payout ratio is 31%. This means it paid out 31% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, IBCP expects solid earnings growth. The Zacks Consensus Estimate for 2024 is $2.95 per share, with earnings expected to increase 0.68% from the year ago period.
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. With that in mind, IBCP 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).