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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 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.
First United Corporation in Focus
First United Corporation (FUNC - Free Report) is headquartered in Oakland, and is in the Finance sector. The stock has seen a price change of -12.85% since the start of the year. Currently paying a dividend of $0.22 per share, the company has a dividend yield of 3%. In comparison, the Banks - Northeast industry's yield is 2.76%, while the S&P 500's yield is 1.62%.
Looking at dividend growth, the company's current annualized dividend of $0.88 is up 7.3% from last year. First United Corporation has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 12.66%. 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 United's current payout ratio is 27%, meaning it paid out 27% of its trailing 12-month EPS as dividend.
FUNC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $3.75 per share, which represents a year-over-year growth rate of 16.82%.
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.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FUNC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).
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Are You Looking for a High-Growth Dividend Stock?
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 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.
First United Corporation in Focus
First United Corporation (FUNC - Free Report) is headquartered in Oakland, and is in the Finance sector. The stock has seen a price change of -12.85% since the start of the year. Currently paying a dividend of $0.22 per share, the company has a dividend yield of 3%. In comparison, the Banks - Northeast industry's yield is 2.76%, while the S&P 500's yield is 1.62%.
Looking at dividend growth, the company's current annualized dividend of $0.88 is up 7.3% from last year. First United Corporation has increased its dividend 3 times on a year-over-year basis over the last 5 years for an average annual increase of 12.66%. 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 United's current payout ratio is 27%, meaning it paid out 27% of its trailing 12-month EPS as dividend.
FUNC is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2025 is $3.75 per share, which represents a year-over-year growth rate of 16.82%.
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.
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 have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, FUNC presents a compelling investment opportunity; it's not only an attractive dividend play, but the stock also boasts a strong Zacks Rank of #1 (Strong Buy).